Tax

What Is Council Tax?

A local authority tax on domestic properties in the UK, charged by band (A to H) based on 1991 property values.

Definition

Council tax is a tax levied by local authorities on all domestic properties in Great Britain. Properties are valued into one of eight bands (A through H) based on their estimated value in April 1991, regardless of current market price. Each local council sets its own Band D rate; other bands are fractions of that rate. Bills can be paid over 10 or 12 instalments. Single occupants receive a 25% discount. Students in full-time education are exempt. Some benefits recipients pay nothing. The average Band D council tax in England in 2026 is around £2,171 per year, though there is substantial variation between councils.

Formula

Council tax = Band D rate x band multiplier (e.g. Band A = 6/9 of Band D)

Example

If your council charges £2,000 for Band D and your property is Band B, you pay £2,000 x 7/9 = £1,556 per year, or about £130 per month.

Use It

Try the Council Tax Calculator

Related Terms

Freehold vs LeaseholdFreehold means you own the property and land outright. Leasehold means you own the property for a fixed number of years under a lease from the freeholder.Ground RentAn annual charge payable by a leaseholder to the freeholder, separate from service charges, for the land on which the building stands.
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