THE WELSH Government is planning major reform of Council Tax bills.

The government is consulting with the public over the three potential approaches to the reform which will see homes being revalued.

In two of these, seven out of 10 homes in lower value property bands would see their Council Tax bills fall or stay the same.

Institute for Fiscal Studies (IFS) suggests that about 470,000 would see higher bills. But between 786,000 and 803,000 could see their bills fall.

The Welsh Government’s three proposed approaches are:

  • Minimal reform: a revaluation of properties to check they are up-to-date but keeping the current 9 bands and tax-rates. 
  • Modest reform: a revaluation plus further reforms to the tax-rates charged for each band, to spread Council Tax more fairly. This means bills for households in lower band properties would fall, and bills for those in the highest band properties would rise. The Welsh Government said this would address "both the outdatedness of the current system and also its unfair, regressive nature".
  • Expanded reform: a revaluation plus further reforms including additional tax bands and changes to the tax-rates. This approach would see the number of bands increase from 9 to 12, adding 1 band at the bottom for the lowest value properties in Wales, and 2 more bands at the top, for the most expensive properties valued at over £1.2 million. This would be a decisive move in the direction of fairness, the Welsh Government said.

The consultation also asks about the pace of change people would like to see. The earliest date for any changes coming into effect is April 1, 2025. However, changes could be deferred until the next Senedd term, or introduced in stages.

In parallel with this work, the Valuation Office Agency, is preparing to carry out a proposed revaluation of all 1.5 million homes in Wales to ensure valuations are up-to-date and in line with current property values.

Under Welsh Government plans, revaluations would happen every five years to ensure people are paying the right amount of Council Tax in relation to the value of their property. This also provides an opportunity every five years to keep looking at the tax bands and tax-rates.

The Welsh Government says it is trying to share the burden more evenly, not raise more in taxation to spend on services.

The amount of Council Tax you pay depends on the value of your home, based on prices from 2003 - with homes currently graded into bands from A to I.

Those in band A, which are valued at less than £44,000 on 2003 prices, pay the least Council Tax, while homes in band I - valued at more than £424,000 - pay the most.

Option one will see the least change, where people's home would be revalued within bands A-I but the tax rates would not be altered.

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The IFS estimates that 320,000 homes would see cheaper bills, 317,000 would see more expensive bills and 834,000 would see little change.

The second option would revalue homes in the same way, but would see lower bills for bands A to C and increased bills for bands E to I.

Estimates suggest 471,160 would see higher bills, 803,582 would see lower bills, and 197,440 would see little change.

Under the top two options the new band system would look like this:

The Leader: Approaches 1 and 2 for Council Tax reform in Wales.Approaches 1 and 2 for Council Tax reform in Wales. (Image: The Welsh Government)Option 3 would look like this: 

The Leader:

Minister for Finance and Local Government, Rebecca Evans, said: "We are asking people to help us shape the future of Council Tax in Wales. Achieving a fairer Council Tax will be one of the single most beneficial actions this government can take towards making Wales a more equal nation. The benefits will be felt in the pockets of many households.

"This is not about raising more money from taxes and changes are not going to happen overnight. We see this very much as being a gradual process and that is why we are also asking for views on the pace of change."