Scottish Government: Council tax consultation

• Views sought on changes to higher bands.

Potential changes to the council tax system that could see those in the highest value properties asked to pay more if they can afford to have been published.

A joint consultation with COSLA is seeking views on plans to increase the amount paid by people in bands E, F, G and H. This aims to address criticism that the system is unfair, because at present those in the lower bands pay a higher proportion of the value of their property than those in the higher bands.

Around 75% of properties would be unaffected if the proposals, which could be phased in over a period of three years, were implemented. The Council Tax Reduction scheme would continue to offer lower bills for those unable to afford their council tax, regardless of what band they are in.

Public Finance Minister Tom Arthur said:

“We have listened to calls for the council tax system to be made fairer, as presently more of the burden falls on those in the lower bands when considered as a proportion of the value of their property.

“The changes would only affect around a quarter of properties and even after they are taken into account, average council tax in Scotland would still be less than anywhere else in the UK.

“We know that many people are struggling with their finances and our Council Tax Reduction scheme is there to ensure nobody has to pay a Council Tax bill they cannot be expected to afford, regardless of what band they are in.

“I would encourage anyone who has views on these proposals to complete our consultation before it closes on 20 September 2023, to help us determine if they should be taken forward.”

Cllr Katie Hagmann, COSLA Resources Spokesperson, said:

“For many years there have been calls to make the council tax system fairer. We are pleased to be working jointly with the Scottish Government to explore ways that we can achieve this. A fairer and more progressive Council Tax is what the proposals in this Consultation aim to do.

“This is a consultation about ways to make Council Tax more proportionate for everyone, so that householders pay their fair share towards the delivery of essential local services, including looking at those higher value properties. We want to hear from individuals, households, and communities to inform any redesign of this local tax, so would encourage people to respond during the 10 week consultation period.

“If you have a view on Council Tax, this joint consultation with Scottish Government gives you the chance to share your views and gives us a chance to make Council Tax fairer.” 

Background

The consultation will run for 10 weeks from 12 July to 20 September 2023. Any changes would come into effect at the start of the 2024-25 financial year.

Even with the proposed increases taken into account, the average Band E to G charge would still be lower in Scotland than in England.

Only around 28% of properties are in bands E-H and could be impacted by the proposed change.

The consultation has been endorsed by the Joint Working Group on Council Tax, which was established as a commitment in the 2021-22 Programme for Government and the Bute House agreement.

In 2015, the Commission on Local Tax Reform highlighted how the original multipliers – set out in the 1992 Local Government Finance Act – resulted in properties in Band H paying three times as much Council Tax as a property in Band A despite the fact that the Band H properties were estimated to be worth, on average, fifteen times the value of properties in Band A. 

In 2023-24, Council Tax for a Band D property in different councils across Scotland varied between £1,261 and £1,515. In Scotland the average 2023-24 Band D rate (£1,417) is £648 less than in England (£2,065), and £463 less than in Wales (£1,879).