Council tax is confusing at first glance, so we've written this guide to clear things up.
This guide will:
- Explain what council tax is
- Outline what it’s for
- Clarify how it changes depending on where you live across London
- Confirm who's expected to pay it and what happens if you don’t.
For more information on living in London apartments check out our essential guide to living in London apartments.
What is council tax?
Council tax is a tax levied by councils around the UK on domestic properties, used to fund local services like bin collection, libraries, and so on.
Every domestic property in the UK, whether rented or owned, will be subject to council tax, though there are several reasons why a household might be exempt (for example if all of the occupants are students) or be given a discounted rate (if there is only one resident or if one of the residents has a disability).
The amount of council tax you'll pay varies depending on the market value of the property in 1991 (yes really), with adjustments to take into account the property's location and size. Each residence is assigned a council tax band between A and H (with H being the most expensive), and generally the more valuable the house the higher the tax.
Local authorities annually set the amount of the levy (the tax bill) for each band.
As well as bin collection and libraries, council tax is used to fund services like the police, fire services, support of the elderly and vulnerable, maintenance of parks and public spaces, street cleaning, and recycling.
Each council decides how to divide up their tax income. On average, council tax makes up for about 25% of local council spending, with the rest coming from business rates and central government.
What are council tax bands?
Council tax bands in England are based on the market value of the property, specifically what it would have sold for at 1991 prices (even if it’s a new-build).
There are 8 council tax bands in London - Band A to Band H. Band A being the lowest property value and Band H being the highest.
Real-time information on UK council tax rates and other related statistics can be found on the Government website, here.
London’s council tax bands: How much should I pay?
Bands C and D are the most common council tax bands, with just over a quarter of the houses in London in each of them.
The rate of your council tax band depends on the costs calculated by your council.
Pimlico, home to Dolphin Square, is in Westminster: an area with some of the cheapest council tax rates in London (and the UK) for a property band D. Westminster is followed by Wandsworth, City of London and then Fulham and Hammersmith.
Be sure to check which band your property is in before you move in. The landlord or letting agent should be able to tell you, and we recommend confirming these figures via the government’s council tax band finder.
As London can be quite expensive to live in, areas with low council tax are very popular, which in turn means that rent and property prices are driven up.
How is my council tax bill calculated?
The local authority calculates the amount they need to raise each year and figure out how to do this through council tax (amongst other things). They set the tax rate based on the bill for a ‘nominal Band D’ property with 2 non-exempt adults living in it.
This is then used as a point of reference to work out how much the bill will be for other bands, increasing or decreasing this by the band ratio. For example, Band D is 100% and Band H is 200%, so this means property in Band H - having been valued at over £320,000 in 1991 - has to pay twice as much council tax as the nominal Band D property.
If your property gets revalued this may put it in a different council tax band e.g. if you have an extension built or turn a single property into multiple self-contained flats. It can also happen if there are major changes to your local area, e.g. if a new road is built.
You can ask the Valuation Office Agency (VOA) if you want to know if changes to your property will affect your Council Tax band.
What happens if I don’t pay council tax?
Some people are exempt from paying council tax, so it’s worth finding out if you have to pay. Bear in mind that council tax is billed per property, not per tenant, so having one student living there won’t exempt the whole house.
You can appeal your bill by writing to your council if you think you should be exempt, for example, if the bill is addressed to the wrong person, or you believe the amount is wrong.
The council won’t accept appeals just on the grounds that you think it’s too expensive - but you can contact the Valuation Office Agency to appeal against your council tax band. However, bear in mind that reappraisals can raise your price as well as lower it!
If you do have to pay and then you don’t, then it’s likely your council will take you to court to get the money all at once, and they’ll probably win, leaving you with additional court costs and possibly bailiff fees as well as your debt.
Council Tax arrears is a ‘priority debt’. So it’s really important that you pay it on time or contact your council straight away if you’re having trouble paying - they can help you, for example, by spreading your payments over 12 months instead of 10.
Information about council tax changes if you're a student:
Do you have to pay council tax if you're a student?
Full-time students are exempt from council tax.
Is student accommodation exempt from council tax?
The short (and brilliant) answer to this question is "yes"!
The rules are that if everyone living in a property (under one address) are all full-time students, then that building is exempt from council tax. As student accommodation, especially halls of residence owned by the university, tend to be full of students this means that you don’t need to worry about it!
So, while you’re in student halls in London, you can spend your pennies on more exciting things and enjoy the local services like waste disposal and street lighting without having to pay for it yourselves.
What defines a full-time student?
To qualify as a ‘full-time student’ when it comes to being exempt from council tax you, need to be enrolled on a course that:
- Lasts at least one academic year, for at least 24 weeks of the calendar year.
- Usually involves a minimum of 21 hours of study, tuition or work experience per term-time week.
If you're not sure, or if you want to get it in writing that you're exempt, you can request confirmation from your university.
Do international students pay council tax?
As it’s not the people but the property that gets the council tax bill, it doesn’t matter if you're a domestic or international student, the same rules apply.
How To Register For Council Tax?
If you’re living in a property where council tax isn’t already included in your rent (like a serviced apartment) then need to contact your local authority. Go to the gov.uk website to find contact details for your council and register with them.
Once you’re registered you’ll be sent your council tax bill in the post and can choose if you want to pay it all in one go or in 10 monthly instalments.
So, if you were wondering “how much is London council tax?” you can see there isn’t just one answer - but hopefully, you now understand where your hard-earned money goes, how to find out how much it is and why it costs what it does.
You can speak directly to your local council if you have further queries about how it works where you live or in an area you are planning to move too.
Council Tax FAQs
Below you'll find answers to some common council tax questions:
WHAT HAPPENS IF I GET A COUNCIL TAX BILL THROUGH THE POST?
If you’re living in a house share with uni mates and the whole household is full-time students, you may still get a Council Tax bill posted to you. Don’t panic! You won’t necessarily have to pay it. Your local council probably isn't aware it’s an all-student household. It’s a simple enough process to apply for an exemption.
WHAT DOCUMENTS WILL I NEED TO APPLY FOR A COUNCIL TAX EXEMPTION AS A STUDENT?
It depends on your local council, but chances are they will request proof that you’re a full-time student. You can request a certificate from your university or institute of study, which they have to provide (unless you finished the course over a year ago).
WHO IS LIABLE TO PAY THE COUNCIL TAX IF THE HOUSEHOLD IS NOT ENTITLED TO A FULL EXEMPTION?
If your household includes non-students then you’ll get a council tax bill, though it should be partially reduced. Technically it’s the responsibility of the non-exempt adult(s) to pay this bill, though many households choose to split it between everyone.
Because the council tax deduction for a property can only be of up to 25% this could mean that if there are 5 students and one non-student living in a house, then the non-student alone will be landed with a bill for a 6 bed property which is still 75% of the original. So the decent thing is to discuss it as a house.
WHAT HAPPENS IF THE HOUSEHOLD CANNOT AFFORD TO PAY IT?
Council tax arrears is a ‘priority debt’. So it’s really important that it gets paid on time. The non-exempt adult can contact your council straight away if they’re having trouble paying. The council may help by spreading the payments over 12 months instead of 10.
For more valuable information like this, check out our guide to living in London apartments.