New council tax index reveals surprising winners and losers

Think council tax rates are highest in areas with eye-watering house prices? Think again

There are very few things about owning property in London that could be described as cheap. But surprisingly, residents in the capital pay below the national average when it comes to council tax.

READ MORE: 27 ways to cut down on your household bills

Not only that, but some of the lowest council tax rates can be found in London’s priciest boroughs, with Westminster having the cheapest council tax rate in England, and council tax in Wandsworth actually falling this year.

But it's not good news for most, as council tax has risen across the country for 2022/23, with the average household hit by hikes of £67, which will see them pay out close to £2,000 in council tax over the next year as the cost-of-living crisis tightens its grip.

According to the latest government council tax figures, the average council tax of a Band D property set by local authorities across England is now £1,966, a rise of 3.5% on last year's figure of £1,898. In London, the average price for a Band D property is now £1,684, though prices have increased slightly more, by 3.8%.

Though this council tax increase is lower than the increase for 2021/2022 of 4.4%—and the lowest rise since 2016/2017—with rising energy and food prices, this will be no consolation to those already feeling the squeeze.

You can check your home's Council Tax Band here.

Areas with the lowest council tax

Those living in Westminster not only get to count the Queen among their neighbours, but they also pay the lowest council tax—just £866 per year.

However, given that Rightmove put the borough’s average price for a terraced house at just shy of £3 million, the low rate is hardly enough to make the area more affordable to the average buyer.

Wandsworth, in southwest London, has also historically had one of the lowest council tax rates, and this year it is one of just four of the 329 local authorities that will see its prices fall—the others being Mansfield, Selby and South Ribble—with residents being asked to pay an average of just £872.55.

Areas with the highest council tax rates

At the other end of the scale, those in Rutland in the East Midlands have to fork out the most for council tax.

Rutland is the UK’s smallest county and the landlocked region is home to just 40,000 people. Nonetheless, each band D property has to pay £2,300 per year, 17% more than the national average. 

The place with the second-highest council tax is Nottingham, where yearly bills will now average £2,294—just £4 more than Dorset, in third place (which it tied with until recently).

Rutland has the highest council tax rate in England. Image: colejizzle / Shutterstock

Lewes maintains its place at number four in the list, while sharing the fifth spot are Wealdon, and Newark & Sherwood, where the average house price for Band D now sits at £2,252.

Top 10 most expensive places for council tax in England for 2022/2023

Challenging your council tax band

If you’ve recently moved into an area with huge variations between the council tax rates for different bands, you might be able to save a chunk of cash by challenging your council tax band.

While bands in Wales are dictated by how much a property was worth in 2003, bands in England and Scotland are allocated based on a home's value in 1991, back when the council tax system was being set up, and the methods of setting these values weren’t especially robust.

If you do some digging into what value was set for your property in 1991 and think it's too high, you can appeal your band with the Valuation Office Agency.

But you can only do this if you’ve lived in the property for six months or less, so don’t let it slip too far down your to-do list.

READ MORE: How much rent should you charge your grown-up children?

Featured image: cktravels.com / Shutterstock