Your Council Tax Is Based On 1991 House Prices
Every council tax bill in England is calculated using a property valuation exercise carried out in 1991 — 35 years ago, never repeated. Here's the full history of why, how far property values have actually diverged since, and why no government will touch it.
The basics
Every property in England is assigned a band, A to H, based on an estimate of what it would have sold for on 1 April 1991 — a date chosen because it was close enough to be current at the system's April 1993 launch, while giving time to complete the mass valuation exercise. Band H covers everything valued over £320,000 — in 1991. Properties built after 1991 are still assigned a band based on a hypothetical estimate of what they would have been worth on that date, calculated by the Valuation Office Agency with no actual 1991 transaction data for that specific property to go on — a rushed process now estimated to have left around 1 in 8 English properties in the wrong band entirely.
The history
Why it's regressive
A Band H property pays just three times what a Band A property pays — despite being worth, even in 1991, at least eight times as much, and often ten to twenty times as much in today's market. Research from the Institute of Welsh Affairs found the lowest-band council tax amounted to nearly 1.9% of a property's value, against just 0.5% for the highest band.
The IFS has identified further unfairness within the banded structure itself, separate from the 1991 freeze: two properties on either side of a band boundary can face a 22% difference in liability despite near-identical value, while two properties at opposite ends of the same band (potentially double the value of each other, for Band G) pay exactly the same. A quarter of all English properties are lumped into Band A regardless of how far below its cut-off they sit, and every Band H property pays identically whether it was worth £325,000 in 1991 or is a multi-million-pound mansion today.
How far values have actually diverged
Property values have moved wildly differently across the country since the 1991 valuations. London values have risen more than six-fold since the mid-1990s, against under three-fold in the North East. Individual boroughs show the same split even more starkly — Hackney is over nine times its mid-1990s value, County Durham just over 2.5 times. Two properties assigned the same council tax band today may bear no relationship at all to each other's actual current relative value, purely because of where in the country they happen to sit.
Why it's never been fixed
The lesson politicians drew from Wales's 2003 experience was that a revaluation is highly visible and politically costly regardless of whether it produces a fairer outcome overall — the losers (households moving to a higher band) complain loudly and remember it at the ballot box; the winners rarely notice or credit the government responsible. The Joseph Rowntree Foundation estimates around 70% of English taxpayers would see little or no change from a full revaluation, yet no party's most recent manifesto has committed to it, despite the legal power to order one having existed since 2006.
Reactions
“The use of out-of-date valuations creates unfairness, both across local authorities and across households within each one.”
“Britain's property tax system is both unfair and distortionary — replacing outdated 1991 valuations would modernise property taxation for the first time in a generation.”
“No government of any party has proposed revaluation since the 2007 abandonment — treated across nearly two decades as too politically risky to attempt, regardless of the fairness case.”
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