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Council Tax and Local Taxation

Council Tax is the system of local taxation used to part fund services provided by local authorities.  Introduced in 1993, the rate of tax payable is based on the value of residential property, it raises around £1.9 billion every year across Scotland.

Although responsibility for setting Council Tax levels rests with local authorities in Scotland, the Scottish Government has worked with authorities to freeze Council Tax since 2007.

The Council Tax freeze will be lifted from April 2017 to allow Councils to increase Council Tax up to a maximum of 3%.  This is part of a wider package of measures to reform local taxation following the report of the Commission on Local Tax Reform.  

The amount that households pay depends on their band (A to H) which is based on the value of the property in 1991, and is worked out from the Band D rate.  The table below shows the share of the Band D rate each band pays.

 

Band

Value (£) (as at 1991)

Rate of Band D

Percentage

A

Up to 27,000

6/9

67%

B

27,001 to 35,000

7/9

78%

C

35,001 to 45,000

8/9

89%

D

45,001 to 58,000

9/9

100%

E

58,001 to 80,000

11/9

122%

F

80,001 to 106,000

13/9

144%

G

106,001 to 212,000

15/9

167%

H

212,001 and over

18/9

200%

Special provisions for single person households, disabled persons and students as well as some other groups exist, which may allow people in those groups a discount on their council tax.

Assistance in meeting your Council Tax liability

People with low incomes may be eligible for help through Council Tax Reduction, which is administered by local authorities.

Further information on how these reduction and other elements of the tax work can be found in our online leaflets.

Reforms to the current Council Tax system

Following the publication of the final report by the Commission on Local Tax Reform in December 2015 the Scottish Government will introduce a package of reforms to the current Council Tax system which will protect household incomes, make local taxation fairer and ensure local authorities are properly funded while becoming more accountable.  Our reforms will:-

  • Make the funding of local services fairer – in a reasonable, measured and balanced way.

  • Raise an additional £500m over the current Parliament which will be provided to head-teachers to invest directly in schools and improve education locally.

  • Make the Council Tax fairer by changing how the rate for more expensive properties in bands E-G is calculated and asking people in these bands to pay more.

  • Increase the child allowance within the Council Tax Reduction Scheme by 25% which will benefit 77,000 households by an average of £173 per year and help nearly 140,000 children across Scotland.

These changes will be in place from April 2017, when we will lift the Council Tax freeze and allow Councils to increase Council Tax across all bands by a maximum of 3%, generating up to £70m.

In recognition that some households in bands E-H will be on lower incomes, we will provide targeted relief from the proposed changes to the Council Tax system for around 54,000 households  (of which more than a third of whom are pensioners household) on net incomes below the Scottish median for their household type, up to a maximum of £25,000. These households will be entitled to claim an exemption from the increases from changes to the banding system through the Council Tax Reduction Scheme.