Hikes from bankrupt Local Authorities, penalties for second homeowners, snooping on sheds and other ways councils are pushing up our tax bills

From snooping civil servants to cuts in support schemes, we reveal five surprising reasons your Council Tax bill might have soared this year.

Sharp rises to our Council Tax bills are now commonplace each April.

But some of the reasons behind some of these hikes might surprise you.

Across the UK, Local Authorities are finding crafty methods to bring in more cash, and in many cases, these hikes are slipping under the radar.

In this article, we’ve rounded up five things that could be pushing up your bill, without you even realising it.

1. Bankrupt councils can hit you with super-hikes

At loveMONEY, this has long been one of our biggest frustrations with the Council Tax system.

If a Local Authority is on the brink of financial collapse, it can ask the Government for permission to raise council tax far above the normal limit.

While most councils in England are capped at a 4.99% increase, bankrupt authorities have been allowed to impose rises of 10%, 15% or even 25% in extreme cases.

This year, for example, Bradford and Newham councils received permission to increase bills by up to 9.99% and 8.99%.

The result? Households can suddenly find themselves paying hundreds of pounds extra with little warning.

And even more infuriatingly, those facing the greatest hikes often end up with the least value for their money.

You can learn more in our opinion piece: incorrect bands, bankrupt Local Authorities & more reasons Council Tax is broken

 2. Putting the squeeze on second-home owners

While second-home ownership has long been a controversial subject in the UK, many Brits regard buying additional property as a means of securing a nest egg for later life.

However, it seems Local Authorities and central Government have other ideas.

From April 2025, English councils have been given the green light to charge a 100% premium on second homes – essentially doubling the annual bill.

In theory, the move is designed to tackle housing shortages in tourist hotspots and raise more funds for local services.

However, many owners say they weren’t directly contacted and only found out when their bill arrived.

3. Cuts to council tax support schemes

While Council Tax benefit was replaced by local support schemes in 2013, the generosity of these initiatives varies widely.

And regional differences are beginning to intensify.

With funding under pressure, some councils have tightened eligibility, reduced discounts or introduced minimum payments – meaning low-income households now have to pay part (or all) of their bill for the first time.

For example, Brent council has introduced a rule insisting all working-age households must now pay at least 35% of their bill.

This is effectively a stealth rise for the most vulnerable, who may have previously been fully exempt.

4. The ‘garden shed’ and outbuilding tax threat

One controversial proposal currently on the table – and making headlines – is the idea of taxing certain garden structures and outbuildings.

The plan’s supporters argue it would help identify properties where extensions, annexes or even large sheds have increased the usable space without a corresponding bump in Council Tax banding.

However, critics claim it is an “overreach” that could see an ‘army of snoopers’ checking gardens for taxable improvements.

Many of these claims allegedly result from overzealous inspections of planning applications.

According to reports in This is Money, others have spotted council staff peering over fences.

5. Extra charges disguised as ‘levies’

Separate from your main bill, some councils have introduced additional annual levies for specific services, such as flood defences, waste collection upgrades or tourism management.

While technically not “Council Tax” in name, they’re often billed alongside it – meaning you might not notice until you compare year-on-year costs.

Council Tax increases 2025/26: how some can cut their bill

Bottom line

While headline Council Tax rates already feel steep, we need to dig beneath the surface to uncover the true cost.

Reduced reliefs and targeted premiums are already quietly inflating what many households pay.

Whether you own a holiday cottage, have a converted loft or live in an area with a financially troubled council, the next bill you receive could be significantly higher than you expect… and it’s important you understand why.