Fairer Council Tax: consultation

A Proposal for Change

Changing the Council Tax multipliers requires regulations to be agreed in the Scottish Parliament, as well as changes to local authority billing and administration systems. These could be delivered in time for changes to take effect from the start of the 2024-25 Council Tax year.

Repeating the 2017 changes would mean Council Tax would increase by 7.5%, 12.5%, 17.5% and 22.5% for properties valuation Bands E, F, G and H respectively if the rates for Band D properties remained unchanged. The average annual increases, based on 2023-24 Council Tax rates, would be around £139, £288, £485 and £781 per dwelling in these Bands respectively, potentially raising an additional £176 million, with around 28% of all properties being impacted.

If changes were to take effect from 2024-25, any increases could be introduced through a phased-approach, with percentage year-on-year increases over a number of financial years (e.g. for Band H around £260 (7.5% based on 2023-24 rates) increase in each of the next three financial years starting from 2024-25, such that the full £781 (22.5%) increase does not apply until 2026-27).

The increases will not fully address the fundamental regressivity of Council Tax. The changes would represent a very significant step towards making Council Tax a fairer tax, particularly with the continued presence of the CTR scheme. A repetition of the 2017 changes provides the basis for the questions in the consultation, although we also ask for views on whether higher or lower increases would be more appropriate.

The proposals will bring Council Tax more into line with the Scottish Government's fair and progressive approach to taxation, as set out in the Framework for Tax.