Last reviewed: May 2026
Quick answer: London Council Tax is shaped by 1991 property valuations, the central government referendum cap, the GLA precept and the Fair Funding Review; revaluation and progressive reform have been proposed for years but never implemented.London Council Tax is often debated, with proposals for revaluation, banding reform, the abolition of the referendum cap, and a more progressive structure all aired in successive reviews. This article explains how the system actually works today, why it has not been reformed, and what the live proposals are.
Three constraints shape every London bill: the 1991 property values used to set bands, the central government cap on annual increases (which triggers a referendum if breached), and the GLA precept set at City Hall. Each is set by a different actor, and none can be changed by a London borough acting alone.
| Band | Property Value (1991) | Ratio to Band D |
|---|---|---|
| A | Up to £40,000 | 6/9 |
| B | £40,001 to £52,000 | 7/9 |
| C | £52,001 to £68,000 | 8/9 |
| D | £68,001 to £88,000 | 9/9 |
| E | £88,001 to £120,000 | 11/9 |
| F | £120,001 to £160,000 | 13/9 |
| G | £160,001 to £320,000 | 15/9 |
| H | Over £320,000 | 18/9 |
London Council Tax bands are still set on 1991 property values, despite repeated reform proposals.
The 1991 valuation problem
England has not revalued Council Tax since the system was introduced in 1993. Bands are still based on what the Valuation Office Agency estimated the property would have sold for in April 1991. London property values have risen sharply since then, but the band distribution has barely moved.
The effect is regressive at the top end of the London market. A house in Kensington valued at £20 million today pays the same Band H charge as a £400,000 home in 1991 terms; both sit at the top of the eight-band schedule. The IFS and the Resolution Foundation have produced repeated analyses arguing that revaluation and new top bands would rebalance the burden, but no government has revalued.
Wales revalued in 2005 using 2003 values and added a ninth band; Scotland reformed the band ratios in 2017 to make the top half more expensive. England has done neither.
Council Tax bands A to H in England
The Valuation Office Agency assigns every home in England to one of eight bands, A through H, based on its value in April 1991. every London borough then sets a Band D rate; every other band is a fixed fraction of Band D.
Band A is 6/9ths of Band D, Band B is 7/9ths, Band C is 8/9ths, Band E is 11/9ths, Band F is 13/9ths, Band G is 15/9ths and Band H is 18/9ths. This ratio is fixed by central government and applies the same way in every London borough as it does in any other English billing authority.
To check your band, look up your address on the Valuation Office Agency search tool, or use the band shown on your annual bill. If you think the band is wrong because of evidence about your property in 1991, you have a narrow window to challenge it once you first move in.
The referendum cap and how it limits London boroughs
Since 2012 each local authority that wants to raise Council Tax by more than a centrally-set percentage has had to hold a local referendum. The cap is set in the autumn for the following year; councils with social care responsibility have a higher cap that includes the adult social care precept.
No English council has won a referendum to breach the cap. A handful have tried; all have lost. The practical effect is that the cap functions as the de facto ceiling on annual rises. London boroughs almost always set rates within the cap because the cost of holding (and losing) a referendum is high.
Critics argue that the cap stops boroughs from raising what they need for adult social care; defenders argue that it protects residents from above-inflation rises. The debate returns every year as part of the Local Government Finance Settlement.
The GLA precept and its role in London funding
The Greater London Authority precept is the same per band in all 32 boroughs and the City of London. It is set at City Hall under the Greater London Authority Act 1999 and funds the Metropolitan Police, the London Fire Brigade, Transport for London responsibilities and the Mayor of London's central office.
The GLA precept has risen significantly since 2016, particularly the policing share, as the Home Office grant to the Metropolitan Police has fallen in real terms. The mayor sets the precept within a Home Office cap; the consultation on the next year runs each November to January with the final figure approved in February.
The London Councils briefing on the annual budget round tracks the precept year on year and is the cleanest source for historical comparisons.
Reform proposals on the table
The live reform agenda for Council Tax in London includes: a full English revaluation using current property values; extra bands above Band H to capture the top of the London market; replacing the band system with a percentage of value (a "proportional property tax"); abolishing the referendum cap or moving the trigger; reforming the Fair Funding Review that allocates central grant; and reforming business rates retention so that London boroughs see more of the upside from local growth.
None of these has been implemented, although several have moved closer to the political mainstream. The Levelling-up and Regeneration Act 2023 added powers to charge a higher empty home premium and a second home premium, but did not change the band system.
Watch the next Spending Review and the Local Government Finance Settlement for any moves toward English revaluation or banding reform.
Frequently Asked Questions
Why does Westminster have a lower Band D rate than the rest of England?
Westminster benefits from an unusually large business rates base, the historic effect of the 2013 council tax base reset, and political choices about reserves. It has set among the lowest Band D rates in England for many years. The structure is exactly the same as in any other borough; the difference is in how the council chooses to use the rate-setting freedom it has.
Could a London borough refuse to charge the GLA precept?
No. The Greater London Authority Act 1999 requires every London billing authority to add the GLA precept to the bill. A borough has no legal power to opt out.
Has Council Tax been revalued anywhere since 1993?
Yes. Wales revalued in 2005 using 2003 values and added a ninth band. Scotland reformed the ratios in 2017 to make Bands E to H proportionally more expensive. England has not revalued and still uses 1991 values.
What is a proportional property tax?
A property tax based on a percentage of the current property value (or assessed value) rather than placement in fixed bands. Various think tanks and campaign groups have proposed replacing Council Tax in England with a proportional model. None of these has been implemented.
When does the GLA set the precept for next year?
The mayor publishes the draft consolidated budget in December, holds public consultation through January, and the final budget (including the GLA precept) is approved in February.
How We Verified This
1991 valuation basis verified against the Local Government Finance Act 1992 and Valuation Office Agency guidance. Referendum cap verified against the Localism Act 2011 and the Council Tax (Referendum Limits) statutory instruments. GLA precept verified against the Greater London Authority Act 1999. Welsh revaluation and Scottish ratio reform verified against gov.wales and the Scottish Government's 2017 council tax reform announcement.
Sources
- gov.uk - Council Tax overview
- gov.uk - Council Tax bands and reductions
- gov.uk - Apply for Council Tax Reduction
- Valuation Office Agency - How Council Tax bands are set in England and Wales
- Valuation Tribunal England - Council Tax appeal procedures and decisions
- legislation.gov.uk - Local Government Finance Act 1992