Council tax is a tax on properties, where property bands are used as a proxy for relative ability to pay. For 2026-27, the system accounts for 53% of the local government core spending power, which local authorities need in order to provide local services. Councils are directly accountable to their local communities for how they raise and spend council tax.

In England, homes are put into one of eight valuation bands based on their capital value in April 1991. The purpose of banding is to arrive at relative values of homes rather than assessing the actual value of each one. The valuation of all properties in England is carried out by the Valuation Office Agency (VOA) who undertake this role independently of ministers. While properties are banded by VOA, the local authority is responsible for determining the level of council tax in their area. This reflects the service needs of each area having taken account of the council’s other sources of income, as well as historic council tax decisions taken by the local authority over several decades.

Council tax is a settled tax which is understood by taxpayers, and which has a high collection rate (95.9% in 2024-25). As such, the taxbase remains broadly stable and the revenues are relatively predictable which means that local authorities have a degree of certainty in their financial planning. To ensure fairness, the council tax system includes a range of reliefs and exemptions, with 34.3% of all dwellings subject to a discount. These range from a single person discount and student discount to a severely mentally impaired disregard. The Government requires local authorities to provide a council tax reduction scheme to support low-income households, with 3.6 million claimants in England. Support for pension-age households is centrally prescribed by the Government and working-age support is designed locally, reflecting the needs and circumstances of local communities. Local authorities also have discretionary powers to offer further support to those they feel are in hardship or financial difficulties.

The enforcement of council tax should be proportionate and sympathetic to those in hardship, whilst striking a fair balance by ensuring councils retain tools to recover council tax they are owed. In 2025 the Government published a council tax administration and enforcement consultation on council tax administration. We are grateful to everyone who engaged with the consultation and are currently reviewing the consultation responses. The Government will publish a response in the coming months.

We recognise that owners of the most valuable homes in England pay proportionately far less tax on their properties compared to those in lower value homes. That is why at the Autumn Budget, the Chancellor set out a new High Value Council Tax Surcharge that will be introduced in 2028/29. This will apply a £2,500 surcharge for properties worth over £2m and a £7,500 surcharge for properties worth over £5m to be collected alongside council tax. Revenue will be used to support funding for local government services, with further detail set to be set out at the next Spending Review. Current council tax bands will not be affected and will still apply.

We want the council tax system to be fair for taxpayers and local authorities and will continue to keep it under review.

Stamp Duty Land Tax (SDLT) is payable when purchasing a property or land over a certain price in England and Northern Ireland. SDLT continues to be an important source of Government revenue, raising around £14 billion each year to help pay for the essential services the Government provides. In addition, it is an efficient tax to administer and collect, as most payments are made on behalf of taxpayers by professional conveyancers as part of the purchase process. The structure of SDLT ensures that those buying the most expensive properties contribute the most.

The SDLT system already works to support home ownership. First-time buyers benefit from paying no SDLT up to £300,000 and can claim relief on purchases up to £500,000. At Autumn Budget 2024, the higher rates of SDLT for additional dwellings were increased by two percentage points from three per cent to five per cent. This will ensure that those looking to move home, or purchase their first property, have a greater advantage over second home buyers, landlords and companies purchasing residential property. This change will raise £310 million by 2029-30, which will be used to balance the public finances and support public services.

The Government is taking action to support those who wish to own their own home. The Government has committed to delivering 1.5 million new homes and is reforming the National Planning Policy Framework to get Britain building, including by reintroducing mandatory housing targets.

Ministry of Housing, Communities and Local Government