Is council tax doubling? What the end of the cap for six councils tells us

What has actually been proposed

From April 2027, six councils will be free of the cap on council tax rises. The government will set no referendum limit in 2027-28 and 2028-29 for Wandsworth, Westminster, Kensington and Chelsea, Hammersmith and Fulham, the City of London, and Windsor and Maidenhead.

The doubling headline comes from one of them. On 15 September, Wandsworth Council said its council tax would need to rise by £958 for a Band D home from April 2027, unless the government changes its funding. That is a 94% rise on this year's Band D bill of £1,020.35. According to the BBC, half of that bill goes to the Mayor of London. If the whole rise falls on the council's half, that half nearly triples.

Nothing has been decided. The council says its final figures will come in its budget in February 2027. The Conservative leader, Kemi Badenoch, says her party has instructed lawyers to challenge the funding cut behind it.

Westminster, whose Band D bill is about £1,049, is reported to be considering a rise of up to 100%. It has not announced a figure.

Most bills are rising by about 5%

For almost everyone else, this year looked like most years since 2016. The average Band D bill in England rose by £111, or 4.9%, to £2,392 in April. Of 384 authorities, 274 raised their share by the full 5% allowed without a referendum.

That limit is 5% for councils that run social care, made up of 3% for general spending and 2% for adult social care. A council that wants to go higher must win a local vote first. Seven councils in financial difficulty were allowed more this year, up to 9% in North Somerset, Shropshire and Worcestershire.

So the doubling is one council's proposal. Across England, bills rose by about 5%. Even if that council goes ahead, its Band D bill of about £1,978 would still be £414 below this year's English average.

Why their bills were so low

The six councils now free of the cap had the lowest bills in the country. The local government minister, Alison McGovern, told MPs in December that their taxpayers paid up to £1,280 less than the average council taxpayer.

A council can keep its rate low if it has a lot of valuable property to tax, a lot of grant from central government, or both. Inner London has had both. The rate is set for a Band D home, but a council with many homes in the higher bands raises more from each pound of it.

Until this year, central government grant was shared out using an assessment of each council's needs and of how much council tax it could raise. That assessment was last brought up to date for 2013-14 and then left alone. The government says this let areas with strong tax bases keep their bills low while others paid more for worse services.

What changed in the funding formula

From April 2026, the government replaced that system with a new formula, known as the Fair Funding Review 2.0. It shares out money using an up-to-date measure of need, including deprivation and the cost of delivering services in each area.

The key change for these councils is how the formula treats council tax. It now assumes every council could charge the national average Band D rate, set at £2,060 for 2026-27 and rising to £2,265 for 2028-29. Each council's grant is reduced by what that assumed rate would raise, whether or not the council actually charges it.

For a council charging far less than average, that is a large cut. Kensington and Chelsea's leader, Elizabeth Campbell, says its funding has been cut by more than £100m, a gap she says a council tax rise alone cannot fill. Transitional arrangements protect 95% of these councils' previous income at first, which is why the pressure lands next year rather than this one.

Then the government removed the cap for the six, for two years. The Institute for Fiscal Studies estimated at the time that two of them might need rises of up to 75%, according to the Independent.

The government argues this is fair. McGovern said it would let more than £250m be shared out according to need, rather than subsidising bills for half a million households in those six areas. The Conservatives say it punishes councils for keeping tax low. The council that proposed the 94% rise says it should not be penalised for running efficient services.

A tax still based on 1991

The funding formula has been brought up to date. The tax it relies on has not. Every home in England sits in one of eight bands, from A to H, according to what it would have sold for on 1 April 1991. A home worth up to £40,000 then is in Band A, and one worth more than £320,000 is in Band H.

Those values have never been updated, and house prices have risen by very different amounts since. In 2020 the IFS found that average prices in London were more than six times their 1995 level, compared with barely three times in the North East. In 2024 it estimated that at least half of homes are effectively in the wrong band, with homes in the North and Midlands often in too high a band.

The bands are also tilted in favour of the most valuable homes. A Band H home pays three times as much as a Band A home, despite being worth at least eight times as much in 1991. The IFS calculated that a home worth £25,000 in 1991 pays about 4.7% of that value each year, while one worth £500,000 pays about 0.7%.

Homes in inner London have risen in value far faster than homes elsewhere since 1991. A national revaluation would move many of them into higher bands. No government in England has attempted one since council tax began in 1993.

What is already being done

England has not revalued, but it has started taxing the top end separately. From April 2028, owners of homes worth £2m or more will pay a High Value Council Tax Surcharge of between £2,500 and £7,500 a year, on top of council tax. The Valuation Office Agency is valuing those homes at 2026 prices, ignoring their current bands.

The surcharge is expected to raise about £430m a year. That is under 1% of the £46.8bn raised in council tax in England this year. Councils will collect it, but on behalf of central government.

Scotland is doing something similar. It plans two new bands from April 2028, Band I for homes worth £1m to £2m and Band J above that, using up-to-date values. Its government says a general revaluation would need a mandate from an election and will not happen this decade.

Wales is the only part of Britain to have revalued. It did so in 2005, using 2003 values, and added a ninth band for the most valuable homes. A law passed in 2024 requires another revaluation from April 2028, but the new Welsh government says it is still deciding whether to go ahead.

In England, the Prime Minister said in July that there were "big decisions ahead" on council tax. Downing Street said reports that he was actively considering replacing it were "not true". The government's recent changes to how council tax is run did not seek views on fundamental reform.

Who pays when bills rise

Council tax is charged on the home whatever the income of the people in it, so steep rises fall hardest on households with the least. Councils in England were owed £7.4bn in unpaid council tax at the end of March 2026, up 11.8% in a year. That is about a sixth of a year's bills.

Help for low-income households is run by each council. In 2024-25, 3.7 million people in England received council tax support worth £4.2bn. The IFS found that almost every council has made its scheme less generous since 2013, leaving the poorest tenth of households £106 a year worse off on average.

The biggest single discount goes to people who live alone. About a third of homes in England get the 25% single person discount, worth about £2.5bn in 2023-24. It does not depend on income, so a wealthy person living alone gets it as readily as a pensioner on a small income.

What to take from it

Some bills may nearly double because three things have met at once. A grant formula that had not been updated for more than a decade was fixed. The government removed the cap for the councils that lost most. And the tax underneath still rests on house prices from 1991.