How to slash your council tax bill

by Rachel Wait on 09 March 2010  |  24 comments
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Find out how you can keep your council tax bills to a minimum!

If there's one thing I hate, it's paying council tax. After all, it's yet another bill to pay and yet more money being beamed out of my bank account.

But unfortunately April is fast approaching and that means my next council tax bill will soon be landing with an almighty thump on my doormat.

And at a time when everyone is tightening their belts, that's not very welcome news. So here's what you can do to reduce the cost of your council tax bill...

Battle of the bands!

The council tax system was established in 1993 when every property was placed into a valuation band. These bands (ranging from A to H, with A being the lowest) were based on valuations made two years earlier.

However, properties in England and Scotland haven't been revalued since then. So that means you may have moved into a different band without realising it, and as a result you could be forking out more for your council tax than you should be.

Neighbours... everybody needs good neighbours

In order to establish whether you should be in a different valuation band, it's worth finding out how much your neighbours pay for their council tax -- you may find that even though they live in a similar or identical house, they're paying a lot less than you.

And don't worry, I'm not asking you to go knocking on your neighbour's door to investigate (not unless you want to of course). All you need to do is go to the Council Tax Valuation List. Just enter your details and hey presto, you'll find all of the information about which council tax band you and your neighbours are in. It's that simple.

Appeal, appeal, appeal

If you do find you're in a higher band than many of your neighbours, it's worth contacting your local valuation office. In some cases you can make what's known as a proposal -- in other words, a formal application to have your band changed. (Note this is for England and Wales only -- taxpayers in Scotland should visit the Scottish Assessors).

There is an official list of reasons for revaluation so it's worth quoting one of these when you make your claim. For example, this could be if part of your home has been demolished (such as a garage), or if there have been physical changes in your area that could affect the value of your property.

If you're successful with your claim, the great thing is you'll be entitled to a refund of your overpayments from when you moved into the property. However, if your claim isn't successful, you can still appeal to an independent valuation tribunal. You can find more information on this here.   

Discounts and exemptions

Even if you are in the correct valuation band, there are other ways to get a discount on your council tax. But before you get too excited, there are strict criteria for assessing whether or not you're eligible.

For example, you might get a reduction if you or someone in your household is disabled. In fact, your bill could be lowered by one valuation band, even if you're in band A.

What's more, if you're the only adult living in your home, you'll get 25% off your bill. It's worth bearing in mind that when you're working out how many adults are in your home, certain people won't be counted -- such as students. (There's more on this here.) So if you're living with a student, you will only have to pay council tax based on one adult living in the home.

If you have a second or holiday home, you will still need to pay council tax for it. But you will receive a 10%-50% discount as no one is living there on a permanent basis.

In some cases, if you're really lucky, you won't have to pay council tax at all -- whether this is only for a short period, or indefinitely.

For example, if your home is empty because it needs major repairs or alterations to make it habitable, you'll have up to a year free from council tax. However, once that year is up, you will have to start paying again -- even if the work isn't finished.

You also won't have to pay council tax for up to six months if the property is empty and substantially unfurnished. However, you are allowed to live in the property for up to six weeks during this time.

Alternatively, you can avoid paying council tax if only students live in the home, or if all the inhabitants are under the age of 18. You can see the full list of exemptions here.

Council tax benefit

If your income and capital (such as savings and property) is less than £16,000, you may be entitled to council tax benefit. This means your council tax bill will either be discounted or cut entirely. If you live with your partner, only one of you can claim and your income and capital will be assessed together.

However, if you live with someone who is not your partner, you may also be able to claim what's known as Second Adult Rebate. To qualify, your housemate must be 18 or over, not paying rent or council tax, and on a low income. You may be able to get Second Adult Rebate even if you don't receive council tax benefit. And this could reduce your bill by 25%.

So if you think you qualify for any of the above benefits, get in touch with your local authority straightaway! And don't forget to check out your council tax band while you're at it - you could be amazed at the savings!

This article was first published in March 2009 and has since been updated.

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