Welsh government announces plans to make council tax fairer

The welsh government has announced plans to make council tax fairer.

The reforms aim to ensure a more progressive approach to supporting the local services which council tax helps pay for, including schools, social care provision, policing, fire and rescue services, and road infrastructure.

The reforms are part of the Cooperation agreement with Plaid Cymru.

Council tax pays for around a fifth of council spending.

The current council tax system is nearly twenty years old and it is claimed it contributes to wealth inequalities - houses in the highest tax band can be worth nine times more than those in the bottom band, though they only pay three and a half times more council tax.

A welsh government press release proposes a future system which rebalances the tax burden on households, funds services that benefit everyone, and has regular updates to keep the tax fair.

The plans include a revaluation exercise to make sure people are paying the right level of tax - this would include a revaluation of all 1.5 million properties in Wales to ensure valuations are up-to-date and people are paying the appropriate amount. This means new bands could be created, with new tax rates for each band. The most recent revaluation in Wales was in 2003 and house prices have increased significantly since then.

A consultation on the plans opened on 11 July and remains open for 12 weeks.

Rebecca Evans, Minister for Finance and Local Government, said: "Council tax pays for essential local services we all rely on, but the way it is currently charged has a disproportionate impact on less affluent people.

These reforms will bring the council tax system up to date while making it fairer, meaning council tax is less of a worry for people with tighter household budgets. The reforms are not intended to raise more revenue from council taxpayers overall as, while some people could pay more, many others would pay less, and we will consider the need for transitional arrangements for any changes.

We recognise this is a significant exercise and that we have a great deal of work to do before any changes can be introduced. These proposals are at an early stage so I encourage people to have their say through the consultation."

WLGA Leader, Cllr Andrew Morgan said: "Council tax is an important source of funding for all our local services from schools and care services, through to waste collection and transport.

While it accounts for around 20% of everything councils spend, it is nevertheless significant, and it is vital that this local tax is kept up to date and fair. A tax that is based on property values that are nearly 20 years out of date cannot be fair and that must be addressed. The system must be made fair across the range of household incomes.

Any proposal will have to be carefully considered given the quirks of the local housing market, and we will work with ministers to ensure that we can deliver this important reform."