Hot Topic Highlight - Council Tax
- 11 hours ago
- 7 min read
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What is this blog about?
In this week’s blog, we look at Council Tax and what you need to know about it for the RICS APC Local Taxation and Assessment technical competency.
What do I need to know for my RICS APC?
Below is an extract from the RICS APC Residential pathway guide (2026), explaining what you need to know, do and advice for this competency:
This is how Council Tax might apply to levels 1, 2 and 3:
Level 1 - you need to know about the legislative framework (Local Government Finance Act 1992), how properties are banded, the valuation basis for Council Tax and the role of the VOA.
Level 2 - you need to demonstrate experience of dealing with banding, such as identifying when a material increase (e.g., an extension) followed by a relevant transaction (e.g., a sale) triggers the property to be re-banded
Level 3 - you need to provide advice to clients on scenarios such as whether a property is in the correct band, the likelihood or a successful appeal or the implications of an extension on the future Council Tax liability
What is Council Tax?
Council Tax is a local tax based on residential property occupation. It is used to fund local services such as waste management, education, safety, infrastructure and social care.
Who pays Council Tax?
Council Tax is paid by anyone over the age of 18 who owns or rents a residential property. There is usually one bill issued per household.
There are some exemptions and discounts for Council Tax, such as single person (25% discount), students, occupational and low income. In some areas, under the Levelling Up & Regeneration Act 2023, furnished second homes may be subject to a 100% premium.
In England, there are proposals for high value properties over £2m (based on 2026 prices) to be subject to a surcharge of between £2,500 to £7,500 per annum. This is to be paid by the owner, not the occupier (if the property is rented) and could apply from April 2028.
Council Tax is usually paid in 10 monthly instalments, although the Government are proposing to move to 12 monthly instalments instead.
What legislation relates to Council Tax?
The Local Government Finance Act 1992, Council Tax (Administration and Enforcement) Regulations 1992 and Council Tax (Demand Notices) (England) Regulations 2011 govern Council Tax.
What is Council Tax based on?
Council Tax is based on the valuation band that the property has been allocated to. The bands run from A (lowest) to H (highest) and are based on the price that the property would have sold for on the open market on 1st April 1991 (England and Scotland) or 1st April 2003 (Wales).
Band | Value at 1 April 1991 |
A | up to £40,000 |
B | £40,001 to £52,000 |
C | £52,001 to £68,000 |
D | £68,001 to £88,000 |
E | £88,001 to £120,000 |
F | £120,001 to £160,000 |
G | £160,001 to £320,000 |
H | more than £320,000 |
In April 2026, most local authorities in England increased Council Tax bills by 4.99%, which is the maximum allowed (5% - 3% for general services and 2% for the Adult Social Care precept) without a local referendum. The average for a Band D property in England for 2026/2027 is just under £2,400.
Have a go at checking your own Council Tax band by heading here. How does yours compare to the national average (bearing in mind that each local authority sets their own rates)?
Can you challenge a Council Tax banding?
Yes, you can make a proposal (if you have a legal right to challenge) or request a band review (if you do not have a legal right to challenge and you think your banding is wrong).
It is important to note that a property is not re-banded immediately after a material increase in value, e.g., an extension is built. Re-banding takes place when a relevant transaction occurs, such as a sale of the property or a new lease of >7 years being granted.
You have a legal right to challenge your Council Tax band if either of the following apply:
You have paid Council Tax on the property for <6 months (i.e., you have 6 months from moving in to challenge the Council Tax band)
The VOA have changed your Council Tax band in the last 6 months
Or (known as a material reduction in value):
If there has been a material change affecting the property, e.g., the property has been split or merged, the use has changed or the local area has physically changed
You want to add or remove the property from the Council Tax list, e.g., the property has been demolished, under major renovation works or is derelict
For the latter types of challenge, one of the following must be provided:
Description of changes
Details of any change of use
Description of the physical change(s) to the local area
Details of physical works
Where you do not have a legal right to challenge, you can request a band review if:
You have paid Council Tax for >6 months
There have not been any changes to the property recently but you think the band is wrong
For a band review, you need to identify a representative sample of properties (for example, five), which are in a lower band to your property and similar in terms of:
Location
Type, e.g., semi or detached
Size, e.g., floor area and number of bedrooms
Age
Style and design
You can also provide sales prices for similar properties between 1st April 1989 and 31st March 1993 (England) or 1st April 2001 and 31st March 2005 (Wales). If the sales prices are outside of the Council Tax bands listed below, you can use them as evidence.
Council Tax band | Properties in England - value in April 1991 | Properties in Wales - value in April 2003 |
A | Up to £40,000 | Up to £44,000 |
B | More than £40,000 and up to £52,000 | More than £44,000 and up to £65,000 |
C | More than £52,000 and up to £68,000 | More than £65,000 and up to £91,000 |
D | More than £68,000 and up to £88,000 | More than £91,000 and up to £123,000 |
E | More than £88,000 and up to £120,000 | More than £123,000 and up to £162,000 |
F | More than £120,000 and up to £160,000 | More than £162,000 and up to £223,000 |
G | More than £160,000 and up to £320,000 | More than £223,000 and up to £324,000 |
H | More than £320,000 | More than £324,000 and up to £424,000 |
I | Not applicable | More than £424,000 |
In England, the challenge is submitted to the VOA, whilst in Scotland the challenge is submitted to an assessor based in the local Valuation Joint Board or council.
What is the basis of value for Council Tax purposes?
Reguation 6(1), (2) and (3) of the Council Tax (Situation and Valuation of Dwellings) Regulations 1992 (SI No. 550), as amended by the Council Tax (Situation and Valuation of Dwellings) (Amendment) Order 1994, defines the basis of value for Council Tax purposes to be the value that the dwelling might reasonably have been expected to realise if it had been sold in the open market by a willing vendor on 1 April 1991.
The assumptions are:
‘(a) that the sale was with vacant possession;
(b) that the interest sold was the freehold or, in the case of a flat, a lease for 99 years at a nominal rent;
(c) that the dwelling was sold free from any rent charge or other encumbrance;
(d) except in a case to which paragraph (3) or (3A) applies, that the size, layout and character of the dwelling, and the physical state of its locality, were the same as at the relevant date;
(e) that the dwelling was in a state of reasonable repair;
(f) in the case of a dwelling, the owner or occupier of which is entitled to use common parts, that those parts were in a like state of repair and the purchaser would be liable to contribute towards the cost of keeping them in such a state;
(g) in the case of a dwelling which contains fixtures to which this sub-paragraph applies, that the fixtures were not included in the dwelling;*
(h) that the use of the dwelling would be permanently restricted to use as a private dwelling; and
(i) that the dwelling had no development value other than value attributable to permitted development’.
You can read more about the basis of value here in the VOA Council Tax Manual.
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N.b. Nothing in this article constitutes legal, professional or financial advice.