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Welsh government could cut majority of council tax bills in Wales by almost £400 – leading think tank

12 Feb 2024 3 minute read
Terraced Houses in Cardiff. Photo by muffinn is licensed under CC BY 2.0.

Wales has an opportunity to “tackle unfairness in the council tax system” and “set the agenda for the rest of the UK to follow”, according to a leading think tank.

Centre for Cities says the majority of houses in Wales could see a real-terms tax cut of almost £400 on average if council tax rates better reflected current house prices.

But it adds, council tax reforms would need to go beyond the scope of the Welsh government’s current proposals to achieve this, by devolving rate-setting powers to local councils, which would enable councils to change how council tax is calculated.

Band D

Three key recommendations proposed by the organisation are to ending the anchoring of tax rates around Band D, revalue properties annually and give local councils responsibility for setting proportional tax rates for each council tax band in line with annual revaluations.

Centre for Cities, which is the leading research organisation dedicated to improving the economies of cities and large towns, insists that the current council tax system is unfair and it It ensures that more expensive local properties face lower council tax rates as a percentage of their property’s value whilst residents of the least expensive properties face the highest tax rates.

In its submission to the Wales council tax reforms consultation today, it argues that fiscal devolution would allow councils to turn council tax from a regressive tax into a progressive tax, with each council adapting bills to suit their local economy.

This broader tax base could give 66 per cent of Wales, including a majority in every council area of Wales, a tax cut in the first year of the policy, according to Centre for Cities’ analysis.

Tax cut

For example, almost 115,000 houses in Cardiff, or 71 per cent of the total, could see an average council tax cut of £364 a year under a progressive system of council tax.

Across Wales, 955,000 dwellings would see a cut in their council tax, with 500,000 houses would see increase.

Andrew Carter, Chief Executive of Centre for Cities, said:” “Council tax is long overdue for reform across Britain. Currently, the highest tax rates apply to the least affluent dwellings. Wales is to be commended for confronting this issue head-on, and it has a real opportunity to set the agenda for the rest of the UK to follow.

“Going further than the current set of proposals could mean delivering lower bills for nearly a million households in Wales and addressing long-standing flaws in a system that was never designed with fairness in mind – giving a much-needed boost to household incomes during a cost of living squeeze.

“An adjusted version of these reforms could also apply to local government in England and Scotland.”

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20 days ago

A CUT IN COUNCIL TAX!!!!!!! Oh look, an elephant just flew past the window.

Linda Jones
Linda Jones
20 days ago

The current banding system is certainly unfair, why someone in a modest house in Splott should currently be paying more in council tax than a multi million pound home in London or even in some parts of Cardiff is beyond me.

20 days ago

This will be messed up whatever happens. How many people are stuck in houses they cannot move from because the costs are too high yet are on the bread line, and how many people are a wage packet from missing the mortgage payments.

The inflation in housing has been a tad mental in the last decade, making decision that way seems to be a double edged sword unless income is also on the cards.

20 days ago
Reply to  Jeff

You are correct when you say that inflation in housing has been a tad mental in the last decade. The cost of a house should be affordable for everyone. I largely blame escalating costs on greedy estate agents and solicitors who push up prices to get higher percentage fees. There should be fixed fees not percentages. Perhaps then the price of property would drop to a sensible level.

Cllr Pete Roberts
Cllr Pete Roberts
20 days ago

Like every proposal around the use of Council tax to raise revenue this contains at its heart one significant flaw. In their linked press release the organisation makes the following statement “This would be paid for by the wealthiest 34 per cent of Welsh households” Wealth being mistakenly equated with property value. For many, particularly in parts of rural Wales, this couldn’t be further from the truth. The reality is the housing market is unbalanced. Builders have focussed on larger executive houses leading to an absence of bungalows and 1/2 bed properties. House prices have been inflated by second home… Read more »

16 days ago

Welsh Government could cut Council tax at stroke, get rid of the colossal index linked pensions and wages that are given to public servants, The people of Wales should know that a massive percentage of their Council Tax goes straight out of their pockets and into the pockets of politicians and council employees and ex employees.. and they can’t afford to empty our bins or buy books for our children in schools.

Last edited 16 days ago by Peter

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