Thousands of households across the UK are discovering they could be eligible for a complete waiver on their council tax, resulting in bills of £0. This comes just before a significant scheduled increase that will see the typical bill for a Band D property rise to £2,394 next year.
How to Secure a 100% Council Tax Discount
For those claiming specific benefits or living on a low income, a crucial financial lifeline exists. Many local authorities operate a Council Tax Support or Council Tax Reduction scheme. In certain circumstances, qualifying applicants can receive a 100 per cent discount, meaning they pay nothing at all. Homeowners and tenants are being urged to check their local council's website immediately to see if they meet the criteria.
This opportunity for relief is particularly timely, as millions of households are set to face a 5 per cent increase in their council tax bills from next year. This hike will push the annual charge for a standard Band D property to a substantial £2,394.
Broader Tax Changes on the Horizon
The adjustments to council tax are part of a wider package of fiscal measures. The government has confirmed that the basic and higher rates of tax on property, dividend, and savings income will each rise by two percentage points.
Looking further ahead, a significant new levy is planned. Starting in April 2028, a high-value council tax surcharge—often referred to as a "mansion tax"—will be introduced. This will impose an annual charge of £2,500 for properties valued over £2 million, rising sharply to £7,500 for properties worth more than £5 million.
Expert Warnings on the Impact for Savers and Landlords
Financial experts have voiced serious concerns about the ripple effects of these changes. Sarah Coles, head of personal finance at Hargreaves Lansdown, described the move as a "really shocking tax rise for savers." She clarified that while the Personal Savings Allowance will still protect the first £1,000 of savings interest for basic-rate taxpayers and £500 for higher-rate taxpayers, any interest beyond that will be subject to a larger tax bill.
Coles also criticised the increased taxes on dividends, stating it "flies in the face of the government’s desire to encourage investors to hold UK equities."
The property market is also bracing for impact. Zena Hanks, a partner at Saffery accountancy firm, warned that higher taxes on property income will "tighten already thin margins." She suggested that "many landlords feel they have little option but to pass costs on to renters" to maintain viability, and for some, this could be "the final straw that pushes them out of the market altogether."
In response to these concerns, the Treasury has stated that in each case, more than 90% of taxpayers will not have income that falls under these new charges.
