PLANS to make the council tax system “fairer” by increasing rates for the highest value properties have been unveiled by the Scottish Government.
The proposals, which have been drawn up with local authority body Cosla, are expected to affect around a quarter of households and could see bills for the most expensive properties rise by almost £800 a year.
Ministers say that the changes aim to address criticism that the current system is unfair because those in lower bands pay a higher proportion of the value of their property than people in more expensive properties.
Under the proposals, council tax would increase by 7.5%, 12.5%, 17.5% and 22.5% for properties valuation Bands E, F, G and H respectively. The rates for Band D properties would remained unchanged.
The average annual increases, based on 2023-24 council tax rates, range from £139 up to £781 per property.
Overall it, would have the potential to raise an additional £176 million for local authorities, with around 28% of all properties being impacted.
Any changes would come into effect at the start of the 2024-25 financial year, but the consultation states increases could be introduced through a phased approach, with the rise taking place over a number of financial years.
However it also states that this while the plans would mean a “very significant step” towards making council tax fairer, it does not address the “fundamental regressivity” of the system. Views are also being asked on whether higher – or lower – increases would also be more appropriate.
Under the plans, the council tax reduction scheme would continue to provide discounts for those unable to afford their council tax, regardless of what band they are in.
Public Finance Minister Tom Arthur (above) said: “We have listened to calls for the council tax system to be made fairer, as presently more of the burden falls on those in the lower bands when considered as a proportion of the value of their property.
“The changes would only affect around a quarter of properties and even after they are taken into account, average council tax in Scotland would still be less than anywhere else in the UK.
“We know that many people are struggling with their finances and our Council Tax Reduction scheme is there to ensure nobody has to pay a council tax bill they cannot be expected to afford, regardless of what band they are in.
“I would encourage anyone who has views on these proposals to complete our consultation before it closes on 20 September 2023, to help us determine if they should be taken forward.”
Councillor Katie Hagmann, Cosla's resources spokesperson, said: “For many years there have been calls to make the council tax system fairer.
"We are pleased to be working jointly with the Scottish Government to explore ways that we can achieve this. A fairer and more progressive council tax is what the proposals in this consultation aim to do.
“This is a consultation about ways to make council tax more proportionate for everyone, so that householders pay their fair share towards the delivery of essential local services, including looking at those higher value properties.
"We want to hear from individuals, households, and communities to inform any redesign of this local tax, so would encourage people to respond during the 10 week consultation period.
“If you have a view on council tax, this joint consultation with Scottish Government gives you the chance to share your views and gives us a chance to make council tax fairer.”
STUC general secretary Roz Foyer said increasing local government resources was the "correct call" but added "tinkering around the edges" would not work.
She added: "The Scottish Government are dressing up an inherently regressive council tax and selling it to the public as a progressive move.
“This is only a short-term solution. We must see bolder moves to complete a wholesale rates review of properties throughout Scotland, replacing the council tax in addition to introducing wealth and property taxes."
The consultation will run for 10 weeks from July 12 to September 20, 2023.
The Scottish Government said that even with the proposed increases taken into account, the average council tax charge would still be lower in Scotland than in England.
