‘Out of date’ council tax system set for reform under under Welsh Government and Plaid Cymru plans
People living in more expensive homes in Flintshire could see their Council Tax bill significantly hiked under proposals to make the taxation system fairer in Wales.
The reforms – part of the Co-operation Agreement between the Welsh Government and Plaid Cymru – would, it is claimed “ensure a more progressive approach” to supporting the local services.
Council tax helps pay for schools, social care provision, policing, fire and rescue services, and road infrastructure.
Proposals include completing 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 would enable different bands to be created with new tax rates chosen for each band, creating a fairer tax.” The Welsh Government said.
Homes in the highest tax band can be worth more than nine times the value of homes in the bottom band, yet only pay three and a half times more council tax.
Council tax pays for around a fifth of spending by councils, but the Welsh Government says the current system which is nearly twenty years is “out of date and contributes to wealth inequalities.”
The Welsh Government wants a future system which “rebalances the tax burden on households, funds services that benefit everyone, and has regular updates to keep the tax fair.” Minister for Finance and Local Government, Rebecca Evans has said.
Minister for Finance and Local Government, Rebecca Evans
The purpose of the revaluation would be to rebalance the tax payable between households.
The last revaluation in Wales was in 2003 and while the value of homes has increased significantly since then, “the system would remain a relative one, so increasing property values would not necessarily lead to increasing council tax.” The Minister 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. ” Rebecca Evans MS, said:
“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.” She added.
Plaid Cymru Designated Member Cefin Campbell said: “Council tax is one of the most outdated and regressive forms of taxation which places a heavier burden on some of our lower income households, and disproportionately impacts poorer areas of Wales.”
“It is time to make it fairer and the proposals we have jointly agreed offer a chance to do just that.”
“These proposals are the first step in changing the council tax system which could make a real difference, by making the system fairer and more progressive while still supporting the services delivered by local authorities.”
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.”
The consultation can be found here.
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