Current council tax bands in Wales are calculated based on the value of the property in 2003. However, from 2025, bands will be set according to what a home was worth in April 2023. The changes could mean an increase to bills for some Welsh residents.
Here, Which? explains how the reforms will affect your council tax bill and whether there are plans to revalue homes in the rest of the UK.
Why are homes being revalued?
For the first time in 20 years, the Welsh government has commissioned the Valuation Office Agency (VOA) to revalue homes based on prices in April 2023.
Announcing the plans in the Senedd Cymru - the Welsh Parliament - finance minister Rebecca Evans said the reforms are needed 'to keep council tax fair in the future'.
House prices have risen considerably in the last 20 years, but council tax has not changed to reflect that. Research by the Institute for Fiscal Studies (IFS) showed that property prices rose 150% between 2003 and 2022.
The think tank says it's led to a situation where you might have two properties in the same local authority area valued equally on today's market, but because the homes were worth different amounts in 2003, they are placed in totally different tax bands with bills hundreds of pounds apart.
. Exact dFind out more:Will council tax bills go up?
Wales currently has nine valuation bands (A-I), based on the market value of properties on 1 April 2003.
Each band attracts a tax rate relative to the middle point, band D - which has a value range of £91,000 to £123,000. However, the band D charge for each local area is set locally by councils as part of setting their annual budgets.
An IFS report in 2019 found undertaking revaluation and keeping the current nine bands would move 25% of properties up bands, 26% down and keep around 49% the same.
Evans says there will inevitably be 'winners and losers' from the reforms, but claims increased property prices do not necessarily mean bills will rise.
'Some people are worried that their homes have increased in value since the last revaluation 20 years ago. That's probably the case for almost all properties,' she says.
'But it's not a case that just because your home has increased in value that you will see an increase in your council tax because, actually, what matters is the relative position of your home across all properties in Wales.'
number of bands to help redistribute the tax burden more fairly. Evans suggests that could mean increasing the number of top bands and ensuring the gaps between the lower bands are smaller.The government says it is collecting new data to understand the number of households that will benefit or be impacted adversely by the updates and, if necessary, they may provide 'transitional arrangements' to help introduce the changes.
Find out more:Deductions and exemptions also under review
Residents in Wales who are the only adult in a property are currently given a 25% discount on their council tax. However, this support is also being reviewed by the Welsh government.
A report in The Telegraph claims scrapping that exemption would mean a 33% increase to council tax bills for single-person households.
However, the Welsh government has denied there are any plans to scrap the single-person's discount and says all existing deductions and exemptions are under review 'to improve and modernise the system ... any specific proposals would be subject to further consultation.'
Find out more:What about the rest of the UK?
In England and Scotland, there are no plans to revalue homes or change the current system.
At the moment, properties in England and Scotland are put into one of eight bands (A-H), depending on the price they would have sold for in April 1991.
Northern Ireland uses a different system called 'domestic rate poundage'. Bills are calculated on property value using what is known as the district rate and the regional rate. Councils set the district rate, while the regional rate is usually set by the Northern Ireland Assembly or the Northern Ireland Office if there isn't a sitting assembly.
There are no planned changes to the system in Northern Ireland either.
source https://www.which.co.uk/news/article/council-tax-revaluation-for-homes-in-wales-on-the-way-will-your-bill-go-up-anOKN0C6es6a