With the average Council Tax bill expected to soar by more than £100 in 2025/26, we look at the various discount schemes and exemptions available.
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Bills to increase by 4.99%
Most Brits are set for another year of crippling Council Tax hikes, with the Government announcing plans to retain the 4.99% cap on increases to our bills in the 2025/26 tax year.
According to forecasts, this increase could add another £109 to the average bill for a Band D property, with the typical household already forking out £2,171 per year.
For those living in the most expensive Band H properties (who already pay an average of £4,342), a 4.99% hike could increase their bills by £217 per year.
Why do our bills keep soaring?
It’s a sad reality that many councils are facing a financial emergency.
As a result, they feel they have little option but to maximise the income from Council Tax, with residents having to find the extra cash.
According to data from the Local Government Information Unit, more than half of Local Authorities could effectively declare bankruptcy within the current parliament.
Even more worryingly, bankrupt councils can hike bills even higher than the usual 4.99%, with Croydon council approving a 15% increase in March 2023.
Luckily, there are ways to lower your bills, including appealing your banding and applying for various exemptions or support schemes.
We explore your options below.
Council Tax is just one of many taxes – click here for our complete guide to cutting your tax bill, including Income Tax, Inheritance Tax, Capital Gains Tax and more.
400,000 in the wrong Council Tax band
One of the best-known ways to lower your Council Tax bill is to challenge your property’s banding.
With current bands set in 1993, many households unsurprisingly sit in an incorrect band in 2024.
In fact, MoneySavingExpert reckons up to 400,000 households in England and Scotland may be in the wrong tax band.
These households could be paying thousands of pounds more than they need to, without realising it.
In England and Scotland, the bands range from A to H, with A being the cheapest, and are based on valuations made in 1991.
In Wales, the bands range from A-I, with A again being the cheapest and are based on valuations made in April 2003.
More than a third of Council Tax appeals successful
For many people, the fear of facing an even higher bill prevents them from asking for a reassessment of their property’s banding.
However, there is some good news.
A Freedom of Information request from Money Mail earlier this year revealed that 99.6% of people who appealed their banding in the year ending April 2023 either saw their bill fall or remain the same.
Some 37% of households that appealed their banding (8,430) were moved into a lower (and less expensive) band.
In contrast, just 0.04% of households (or 10 properties) were moved into a higher band.
Could you be in the wrong band?
To establish whether you should be in a different valuation band, it's worth finding out how much your neighbours pay for their Council Tax.
You may find that even though they live in a similar or identical house, they're paying a lot less.
We’re not suggesting you knock on your neighbour's door and pry into their finances (not unless you want to).
All you need to do is go to the Council Tax Valuation List. Just enter your details, and you'll find all the information about which Council Tax band you and your neighbours are in.
How the appeals process works
If you're in a higher band than many neighbours, consider contacting your local valuation office and challenging your Council Tax band.
In some cases, you can make what's known as a ‘proposal’ – in other words, a formal application to have your band changed.
As part of this process, you should explain why your band should change and which band you believe you should be in. Providing as much evidence as possible to support your claim is a good idea.
Note, this is for England and Wales only. Taxpayers in Scotland should visit the Scottish Assessors.
You'll get a decision within two months. Either you will be moved into a different band, with your payments adjusted, or you'll be told why your band cannot be changed.
If you're successful with your claim, you'll be entitled to a refund of your overpayments from when you moved into the property.
However, if your claim isn't successful, you can still appeal to an independent valuation tribunal. You can find more information on this here.
The tribunal is free, but you must appeal the valuation office's decision within three months of the decision.
Discounts based on property residents
Even if your home is in the correct valuation band, there are other ways to get a discount on your Council Tax.
Single Person Discount
You should be eligible for a 25% reduction on your bill if you are the sole occupant of your property. To claim the discount, you’ll need to contact your local council and attest that you don’t have anyone else living with you.
You may also qualify for a Single Person Discount if you live with someone exempt for Council Tax purposes, including those under 18, someone living with a disability or a student.
Students
If you live in a home exclusively occupied by full-time students, you’ll be exempt from Council Tax.
To qualify as a student, your course must last at least one academic or calendar year and run for a minimum of 24 weeks of the year.
You’ll typically also need to undertake at least 21 hours of study, tuition or student work per week.
Disabled Band Reduction Scheme
Under the Disabled Band Reduction Scheme, you may receive a discount if you live in a larger property than you would if one of the residents weren’t disabled.
If you are eligible for the scheme, your Local Authority will reduce your bill to that of the next lowest Council Band. For example, if you live in a Band C property, you would pay the rate of a Band B property.
If your home is already in Band A (the cheapest band), you will receive a 17% reduction on your bill.
Discounts based on property type
You may also qualify for a reduction if you live in or own certain types of property.
Empty homes
If you own an empty, unfurnished property, you may qualify for a discount on your bill, although this is at the discretion of your council.
Again, the discount amount is up to the council.
The empty home discount can also apply if the occupant is in prison, has moved into a care home or hospital, or if the property is derelict.
Ironically, however, you could pay a higher Council Tax, referred to as a ‘premium’, if your property has been unoccupied for more than a year.
The amount of this premium will depend on the length of time your property has been empty.
You could pay up to four times your usual Council Tax bill if your property has been empty for 10 years or more.
Note that you will be exempt from the premium if you are in the armed forces and need to move around for your job.
Second homes
If you have a second or holiday home, you still need to pay Council Tax.
At present, you can get a discount of up to 50% – although you'll need to contact your council to find out how much they are willing to offer.
From April 2025, however, councils will be able to double the Council Tax on second homes, as long as they provide a year’s notice.
Inherited property
If you're selling an empty property on behalf of someone who has died, you won't have to pay Council Tax for six months from the day you get probate.
At this stage, the executor becomes responsible for the bill.
If you plan to live in the home, you’ll need to begin paying the tax when you move into the property.
Annexe
You could be eligible for a discount if you have an annexe (or similar structure) attached to your home.
A council typically defines an annexe as a self-contained living space independent of your main home.
To qualify for a discount, the annexe will need to be “in use” as a separate living space by the main homeowner or occupied by a dependent family member.
If you have a qualifying annexe, you should receive two Council Tax bills – one for the main home and another for the annexe.
The annexe will qualify for a 50% discount, although you’ll still pay the standard rate on the main property.
Reduce your bill by up to 100%
Council Tax Reduction replaced Council Tax Benefit in April 2013. It could reduce your bill by as much as 100%.
You may be eligible if you’re on a low income or claim certain benefits, such as Personal Independence Payments, Attendance Allowance, Carers Allowance or Disability Living Allowance.
Each council runs its own scheme, so the details vary by area.
What you get depends on your household income and how many children live with you.