Introduction
This research compares average band D council tax for the year 2023-24 against house prices and median gross pay in the local authority areas of Great Britain. Many of the trends identified in an earlier TPA study in 2021 have continued, with far higher burdens facing those in the North of England.
Council tax is charged by local authorities to the occupants of residential property. Council tax was introduced in Great Britain in 1993 to replace the community charge, which itself replaced domestic rates in 1990 in England and Wales (and in 1989 in Scotland). Domestic rates have not been replaced in Northern Ireland. Council tax is applied to residential properties in eight bands based on 1991 property valuations (nine bands on 2003 values in Wales). Local authorities set local rates, but the valuation bands are set centrally by the Scottish and Welsh administrations outside England.[1]
Council tax is linked to the value of a property. While some areas have had greater property pricing increases than others, council tax in England has increased by 79 per cent in real terms in the last 30 years.[2] This means that council tax payments have generally risen relative to both property prices and income, disproportionately affecting those in areas with lower house prices. For example, London residents have the cheapest council tax bills in the country on average despite the highest house prices.[3] The national burden of council tax in relation to median average earnings has increased by 108 per cent from its introduction in 1993 to 2022. [4]
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Key Findings
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Burnley had the highest council tax relative to house price with the band D tax being £2,244 to an average house price of £116,172 or 1.93 per cent per year.
- Westminster had the lowest council tax relative to house price, with band D residents paying £914 on an average house price of £927,774, or just 0.1 per cent.
- Out of the ten lowest charging councils relative to house price, nine are in London with only Elmbridge outside of the capital.
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62 councils charge over one per cent of the average house price in council tax, none of which are in the South West or London.
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West Devon, which has the lowest median salary, charges the highest council tax relative to salary at 10.85 per cent - The 20 lowest earning districts in the UK all charged over 8 per cent of the average salary in council tax.
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West Devon, Nottingham, Pendle and Torridge all charge over 10 per cent of the median salary for their region in council tax.
- Relative to both house prices and median pay, the four lowest charging councils were all in London.
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[1] Valuation Office Agency, How domestic properties are assessed for Council Tax bands, GOV.UK, 22 January 2016, www.gov.uk/guidance/understand-how-council-tax-bands-are-assessed, (accessed 15 May 2023).
[2] Basey, P. Thirty Years of Council Tax, TaxPayers’ Alliance, 2023.
[3]Duell M, Beckford M. www.dailymail.co.uk/news/article-11899155/Where-expensive-cheapest-council-tax-England.html (Accessed 16 May 2023)
[4]www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/adhocs/005595newearningssurveynesmedianoccupationaldata1970to1996 (Accessed 24 July 2023)