Council tax shake-up in Wales put off for another three years, Welsh Government announces

Council tax in Wales won't be shaken up until 2028, it has been announced. Credit: ITV Cymru Wales

The Welsh Government has put off plans to shake up council tax for another three years.

Finance secretary Rebecca Evans says she has chosen to adopt a slower timetable after carrying out a consultation but that the Welsh Government remains committed to making council tax fairer.

Reforming council tax was one of the main pledges in Labour's Co-Operation Agreement with Plaid Cymru, which said it was "disappointed" by the announcement.

Ms Evans said 1,676 responses were received from members of the public and a range of expert organisations during a phase-two consultation, with 67% of respondents wanting some changes to council tax. 35% opted for the slowest timeframe option, starting in 2028, with 24% opting for the fastest timetable, from 2025, and 17% choosing staged implementation.

In an update to MSs, she said: "Having listened carefully to the consultation responses and the broader public conversation, I intend to deliver council tax reform over a slower timeline in line with the majority view of those who responded to our consultation.

"We now plan to introduce the structural reforms to the council tax system from 2028, although I will deliver other improvements by the end of the Senedd term.

"While looking at options for reform, we have also considered the necessity of an appropriate transition fund and the immediate implications such a fund would have on the broader financial pressures we currently face.

"I believe this approach demonstrates a continuing commitment to fair and progressive taxation, as well as this Welsh Government’s commitment to listening to the people of Wales.

"The Welsh Government remains committed to our aim of making council tax fairer and more up-to-date."

While council tax in England and Scotland is still charged according to 1991 property values, Wales is the only nation of the UK to have revalued council tax but the tax bands are now based on information more than 20 years old.

The Welsh Government is in the process of establishing regular revaluation cycles in the Local Government Finance (Wales) Bill which is currently being scrutinised by the Senedd.

Ms Evans plans to bring forward an amendment to the Bill to begin five-yearly revaluations from 2028 to keep council tax "fair and responsive to economic circumstances, and it provides a regular opportunity for taxpayers to engage with the revaluation process, improving the transparency of how things work".

On revaluation, her statement added: "The Valuation Office Agency (VOA) has developed new technology in discussion with international experts on valuation methods. We now have systems in place which provide comprehensive and robust information about up-to-date property values to advance our path to delivery in 2028."

There are also plans to streamline the appeals process, and raise awareness of how council tax works and what it pays for.

Ms Evans added: Council tax remains a central part of how we fund local government in Wales. Almost everyone benefits in some way from the contribution it makes to the work of our local authorities.

"However, we have to make sure the way we collect council tax is fair and based on the most consistent and best information that we have available. We also need to recognise the financial pressures that households are living through at the moment.

"I will continue working through these challenges in the years ahead, and I am protecting local services as much as possible at a time of enormous pressure on the Welsh Government’s and local government budgets.

"The work I describe above addresses our commitment to creating a fairer council tax system while ensuring that our arrangements are fair in both operation and implementation."

Peredur Owen Griffith, MS the Plaid Cymru spokesperson for local government and finance, said:

“Reforming Council Tax and creating a fairer system is a key part of o Plaid Cymru’s vision for a fairer and more progressive Wales.

Whilst we’ve succeeded in ensuring that Welsh Government commits to reform, we are disappointed that it hasn’t adopted a more ambitious timetable.

We had hoped that Welsh Government would seize the opportunity to move quickly help some of the poorest householders, currently suffering the worst effects of the cost-of-living crisis, and who would have benefited from lower bills in 2025.”

Citizens Advice Cymru said Council Tax was in "desperate" need of reform.

"[The tax] puts an unfair tax burden on low income households - and property values are already more than 20 years out of date", said Assistant Director Luke Young. We do not see a clear benefit for the people we support in waiting until 2028 to begin the revaluation.“In recent months we have seen a worrying rise in the number of people struggling with council tax arrears. In the first months of 2024, we saw 19% more people with council tax debt compared to the same time last year.“Having pushed back wider reform the Welsh Government now need, as a bare minimum, to get on with essential action to stop the poor debt collection practices that make things worse for people. We also want to see quick progress to simplify access to Council Tax Reduction for those on lower incomes. There are many eligible who aren’t receiving it.”