Spotted a fantastic house to buy or apartment to rent on your dream street in London? Before you fall head over heels, you might want to check the council tax band. Surprisingly, that charming Victorian next door could be in a completely different band to the one you're eyeing up. Here’s why.
Confusion around council tax is incredibly common in London. It can vary dramatically street by street, house by house, and borough by borough. Let's demystify these council tax bands and discover why they can be so different.
What is council tax for?
Simply put, council tax funds the services that make your neighbourhood tick. It's collected by London boroughs to pay for essentials like waste collection, maintaining public parks, street lighting, and local services.
Properties are placed into bands (A through H) based on their valuation. This is the primary reason why different properties, even on the same street, pay different amounts.
The significance of 1 April 1991
Here's where things get interesting. The current council tax banding in England is based on property values from 1 April 1991. Yes, you read that correctly – 1991!
If your home was built after this date, the Valuation Office Agency (a government body independent from London’s councils) will estimate what it would have been worth back then.
Has the value of homes changed in the last 30+ years? Without a doubt. But the bands remain locked in that moment in time.
Why are different streets paying different amounts?
Even properties on neighbouring streets can fall into different bands. Why? Because the mix of property types, sizes, and conditions (as they were in 1991) can vary significantly even within short distances.
One street might have had larger houses or properties with features that were considered particularly valuable in 1991. So why stick with such an outdated system? Undertaking a new national revaluation would be an enormous, complex and politically sensitive task. It would mean reassessing millions of properties and potentially shifting tax burdens dramatically – not to mention the hefty administrative costs.
While there have been calls for an update, no government has taken on this challenge since the bands were established.
What makes your band different from your neighbour's?
Several factors based on those 1991 values determine your council tax band:
• Property values in 1991: The foundation of the current banding is what your home was worth over three decades ago.
• Property size, layout, and features (as of 1991): The number of bedrooms, bathrooms, extensions, and overall size all influenced the original valuation.
• Imagine this: Your terraced house with a fashionable loft conversion added in 2020 might still be in a lower band than your neighbour's slightly larger unconverted house, simply because of how they were valued in 1991.
• Property type and Design (as of 1991): Different property types were valued differently back then. In London, a purpose-built flat in a block might have been valued quite differently from a converted period property on the same street.
• Neighbourhood differences in 1991: Even subtle variations in desirability or immediate surroundings could have led to different valuations.
Think about factors like proximity to a small green space, noise levels from a nearby road (as they were in 1991), or even slight variations in plot size.
This can be particularly frustrating as these micro-location differences might have changed dramatically over the past three decades.
What can London residents do about it?
If you believe your property is in the wrong band, you’ve got options.
The government has outlined steps you can take to challenge it. First, contact the Valuation Office Agency with evidence explaining why you think the band is incorrect. They might be able to sort it out immediately. If not, you can submit a formal challenge through the official government website.
There are also a range of different discounts and exemptions available, like the:
• Single person discount (25% off if you live alone)
• Student exemption (full-time students don't pay)
• Benefits-related support
• Disability reduction scheme
You can find the full list here.
The bottom line
While the council tax system isn't perfect, understanding how it works can empower you when house-hunting or budgeting for your current home.
Looking for a new place to buy or rent? Council tax probably isn't at the top of your priority list (although if you're curious, check out our article on boroughs with the lowest average council tax in 2025).
There's so much more that impacts your day-to-day life in a property than the tax you pay on it – like the perfect location or the space that matches your lifestyle.
Whatever it is you’re looking for, we can help you find it. We are, in fact, London’s largest estate agent1 because of our sales and lettings instructions – so you really are spoilt for choice with us.
Just sign up to My Foxtons to tell us what you're looking for, and we'll get it done for you:
1Source: TwentyCI data, 2024 new sales instructions at an estate agent brand level; TwentyCI data, 2024 new lettings instructions at an estate agent brand level
Source: Much of this article’s insight comes from the government’s own literature on Council Tax, such as you can find here. The rest comes from Foxtons Sales and Lettings departments, for whom council tax is a common topic - and one we work hard to help our clients understand. If you have any questions on this article, ask a Foxtons expert
