How to slash hundreds of pounds off your council tax bill (and what to do if you overpaid)

Households have been hit by huge council tax rises this year after Rishi Sunak allowed councils to increase the levy by 5pc without holding a referendum. 

The bill for a typical Band D property is now set to reach £2,000 in 2023-24, according to analysis by the pressure group Taxpayers’ Alliance – up almost 80pc in thirty years. 

With bills soaring, it is more important than ever to check you are not overpaying council tax. 

A surprisingly wide range of discounts are available to many individuals – including students, people with disabilities and those with an annex or an empty property – which could shave hundreds of pounds off your annual bill.

Many others could be paying more council tax than they should if their property has been placed in the wrong band. 

The council tax system is notoriously outdated, with bands in England and Scotland based on property sales prices from 1991; in Wales, it’s based on 2003 values. 

If your home has been placed in a higher band than it should be, then you could be owed thousands of pounds in overpaid tax from the council. 

How to get a council tax discount

Lots of people may be eligible for a council tax discount – but these aren’t applied automatically, so you’ll need to apply to your local council to get the discount applied.

If you are the only adult in your home, then you can get a 25pc discount. 

You can also get this discount if you live with people who are exempt from paying council tax, including: 

• Children under 18
• Full-time students
• Student nurses
• Apprentices
• Carers (providing at least 35 hours’ care a week) if they are not the main resident’s husband, wife or civil partner
• People with severe mental impairments, such as dementia, who are also claiming a benefit such as the Severe Disablement Allowance
• Individuals with diplomatic privileges and immunities
• Ukrainian citizens living with you under the “Homes for Ukraine” scheme.

If everyone living in the home is disregarded, then you get 50pc knocked off your bill. You pay no council tax if everyone in the house is a student or under the age of 18.

Other households where no council tax is due include prisons, armed forces accommodation and care homes.  

Empty properties and second home discounts 

If you have an empty property, then your local council might offer you a discount. 

However, councils can charge a premium if the second home has been empty for over two years – except in certain cases, for example where structural work is needed to make the property safe. 

Some councils will offer a “second home discount” if you have a second home but no one lives there on a permanent basis. The council will decide the discount, although it is likely to be about 10pc. 

That being said, councils in tourist hotspot areas like Devon and Cornwall have threatened to heavily increase council tax paid on second homes. In Wales, powers to increase council tax by up to 300pc on second homes came into force in April.

Annexes are usually subject to a separate tax bill. However, you may be able to get a 50pc discount if you live in the annexe while a relative pays council tax on the main property.

There will be no council tax if the residence of the annexe is a dependent of the owner of the main property. This means those who are over 65, disabled, or severely mentally impaired. Students and children under 18 are also exempt. 

If you live with someone who is disabled 

If you need to live in a bigger property than you otherwise would because one of the residents is disabled, then you may be able to get a council tax reduction.

The property must have an extra kitchen, bathroom or other room used to meet the needs of someone who is disabled, or enough indoor space for the disabled person to move their wheelchair around.  

If you are eligible, then you will drop a council tax band. 

If you are on a low income 

You could be eligible for a discount of up to 100pc of your bill if you are on a low income or claim certain means-tested benefits. 

Alternatively, you may be able to get a discretionary reduction from the council if you are struggling to pay for essentials. 

You may be able to get a second adult rebate if you are living with an adult who is not your partner, does not pay you rent or have a contract with your landlord, and is on a low income or getting certain benefits. 

What to do if you think you’re in the wrong council tax band

If you think your property might be in the wrong council tax band, there are a few steps you should take before making an official appeal to get it reassessed. 

Firstly, if your neighbours have a property that’s the same age, size and style as your own, start by asking them what council tax band they are in. 

Or, if you prefer, you can use the Government’s council tax band checker to find out for yourself: https://www.gov.uk/council-tax-bands. If neighbouring properties are in a different band to yours, it’s your first clue that you might be in the wrong one. 

You then need to work out what your property was worth in 1991, when the council tax system was first introduced (or 2003 if you’re in Wales). You can often get historic sale prices online for free from a property website like Zoopla or Rightmove.

Then check whether this valuation matches up with your council tax band. If it seems like your current band is too high, then you may want to ask for a reassessment. 

This means requesting a revaluation with the Government’s Valuation Office Agency (VOA), or the Scottish Assessors Association (SAA) if you’re in Scotland. 

You will need to have your evidence – including old house price information and examples of similar properties in different council tax bands. 

If it turns out you are in the wrong band, then the council will refund you all the extra tax you have paid while in this band, as well as charging less council tax in future.

Your property is more likely to be in the wrong band if there have been significant changes to the building or the surrounding areas since 1991 – for example, if the building has been converted into a block of flats.

It is worth doing your research before asking for a band review – otherwise you could be placed in a higher band and end up paying more tax.