Council tax can seem quite confusing at first glance, but they don’t have to be. This simple guide will explain what council tax is, what it’s for, and how it changes depending on where you live across London, as well as who is 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?
Every 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 tax varies depending on the market value of the property in 1991 (yes really), taking location and size into account. The residence is assigned a council tax band between A and H (with H being the most expensive) - the more valuable the house the higher the tax.
Local authorities annually set the amount of the levy (the tax bill) for each band. This money paid by residents goes towards funding services in the local community.
These services include the police, fire services, support of the elderly and vulnerable, maintenance of parks and public spaces, street cleaning, bin collections and recycling.
How it’s divided up is up to the local council. Council tax makes up for 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.
The average cost in 2018-2019 of Council Tax in England was £1,114 for a property in Band A, and £3,342 for a property in Band H - but this can range hugely as each individual local authority gets to set the cost of the levy for a property in Band D (and then all the other bands are calculated off that).
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, and has the cheapest council tax rates in London (and the UK) for a property band D, 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 - or you can use 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 - e.g. full-time students and people with disabilities 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.
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.
For more valuable information like this, check out our guide to living in London apartments.