Council tax discount of up to 100% before major bill rise | Personal Finance | Finance
Millions of households are preparing for a 5% rise in their council tax bill next year, but there are methods to lessen the blow. The Office for Budget Responsibility (OBR) revealed in documents published following the Budget that it expects council tax bills in England to climb by this percentage next year.
This represents the maximum increase English councils can implement without requiring a referendum. It comprises a 3% general rise, plus an extra 2% allocated for social care.
The typical annual council tax bill for a Band D property stands at £2,280, meaning this would jump to £2,394 next year. This comes after Rachel Reeves‘ unveiling of a new “mansion tax” on the most costly homes.
Properties worth over £2million will face a new surcharge from April 2028. Homeowners of properties valued between £2million and £2.5million will pay an additional £2,500 each year, whilst owners of properties exceeding £5million will incur a £7,500 charge, reports the Mirror.
Cutting your council tax bill
Check with your local council whether you qualify for a council tax discount. For example, if you live alone, you’re entitled to a 25% reduction on your council tax bill.
If everyone in your household is exempt from paying council tax, you receive a 50% discount. If you’re receiving benefits or have a low income, establish whether your local authority runs a Council Tax Support or Council Tax Reduction scheme.
In certain cases, you could be eligible for a 100% discount on your bill. Finally, it might be worth challenging your council tax band. If you’re in a band that’s too high, you could be entitled to thousands of pounds back, as well as reduced bills in the future.
However, do your homework first, because if you’re in a band that’s too low, your future bills will increase.
Potential changes to council tax payments
The government is currently considering plans to spread council tax payments over 12 months, rather than 10. You can already request to have your payments divided over 12 months to make them more manageable – but under the proposed plans, this would become the standard.
According to data from the Ministry of Housing, Communities and Local Government, the average Band D household would pay roughly £38 less each month if they paid over 12 months. Households will still have the option to pay their council tax bill over ten months if they prefer.
The consultation also suggests slowing down the debt collection process when someone has missed a council tax payment.
