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The Council tax banding system is highly regressive in that the higher the valuation band the less as a proportion of the value of the property is paid in the tax. Band H homes are worth at least eight times as much as those in band A but pay only three times as much council tax.  Properties in  band A pay at least 2.67 times as much  as a percentage of property value as homes in H pay. The percentages payable for each band in England are illustrated  below for the rates of council tax in 2010 - 2011. As the  valuation levels increase there is a steady decrease in the percentage of tax payable.  Band A properties are valued at £40,000 and under, and pay an average of of £959 in council tax which is at least 2.40% of the value. This band includes properties worth less than £40,000 and these will be paying even higher percentages. For example properties worth £20,000 are paying an average of 4.80% of their values in council tax. At the other extreme, homes in band H are worth at least £320,000 and in 2010-2011 pay average council tax rates of £2,878 which is at most 0.90% of their values. This bracket has no upper limit and includes the most expensive homes in the country but they are still paying the same council tax rates as £320,000 dwellings, which means that they are paying even lower percentages of their values. Homes worth a million pounds are paying 0.29% of their values in council tax, and those worth five million are paying 0.06 percent. If a £40,000 property was paying at these rates the bills would be £115 and £23 per year in council tax. A £20,000 property would pay only half those amounts. There is also a considerable degree of regressivity within each band with properties having values that place them towards the bottom of each bracket paying higher percentages of their values in council tax than those at the top.  This is because, in any given authority, all properties within a valuation bracket pay the same amount even though they may differ substantially in values. Band   G for example includes homes ranging in values from £160,000 to £320,000, so that those at the bottom are worth only half as much as those at the top but are paying the same amount of council tax. The table below shows that for 2010 – 2011 the differences in the percentages payable between the top and bottom of bands B to G range from 0.43% to 0.75%. There is an even greater regressivity within the other two bands because A has a lower limit of zero and H has no upper level. As already indicated properties worth £20,000 or less are paying on average at least 4.80% of their values which is twice the percentage paid by homes at the top of the band. Homes worth £320,000 at the bottom of band H are paying 0.90% of their values which is three times the percentage paid by 1 million pound homes and 15 times that paid by 5 million pound homes. As might be expected, Council tax is regressive with respect to income in that the less well off pay more as a proportion of their earnings than people with higher incomes. The richest fifth of households pay only about a third as much in the tax as a proportion of their incomes as the poorest fifth. Accountability is undermined by the regressiveness of council tax and this is another disadvantage of the system.

Amount of council tax paid for each band in England for 2010 – 2011 as a percentage of property value. The last column shows the differences in percentages paid between properties at the top and bottom of each band.


Band         Tax as % of Value    Difference                                                                                                  
   A           2.40% and Over          N/A          

   B           2.15% to 2.80%          0.65%

   C           1.88% to 2.46%          0.58%      

   D           1.64% to 2.12%          0.48%      

   E           1.47% to 2.00%          0.53%      

   F            1.30% to 1.73%          0.43%      

   G           0.75% to 1.50%          0.75%      

   H           0.90% and below           N/A  




Council Tax Benefits Charges Rates Bands Exemptions
Copyright (2007)