Millions of households across Britain could see their council tax bills change under a major shake-up signalled by the new Prime Minister, Andy Burnham. He has described the current system as outdated and unfair, particularly for people in Greater Manchester who often pay more than those living in much larger homes in London.
Burnham confirmed he is open to introducing reforms that would revalue the property bands used to calculate council tax. Most homes in the UK have not been revalued for more than three decades, meaning current bills still reflect property values from the 1990s. The Prime Minister argues this has created a system where some occupants of expensive London properties contribute less than residents in other parts of the country.
Any change to the banding system could lead to lower bills for some households, but it would likely mean significant increases for others, especially those living in high-value properties that have risen steeply in price since the early 1990s.
How council tax bands work
In England and Scotland, homes are placed into bands between A and H, depending on their estimated value on 1 April 1991. A typical property falls into Band D, which is used as a benchmark for setting local rates. Since the bands were last set, property prices have soared unevenly across the country, yet the band values have remained frozen, causing what critics describe as a postcode lottery.
The system in Wales was revalued in 2003, and properties there have been reassessed more recently, but in England no revaluation has taken place since the initial banding. Earlier attempts to reform council tax have always been treated as highly sensitive, largely because revaluations can create dramatic changes to individual bills. A sudden increase in a household's band could mean thousands of pounds in extra annual costs, while others might see a welcome reduction.
Burnham's comments on fairness
Speaking to the BBC, Burnham highlighted the disparity, saying: "There are people here in Greater Manchester who pay a much higher council tax than people living in much larger homes in London."
He went on to praise the previous Chancellor, Rachel Reeves, for starting to address this issue. "So the Chancellor before, Rachel Reeves, was right to start to reform council tax to create some fairness there in relation to people in homes that are of much greater value who haven't seen their council tax go up over the years because of the failure to revalue the banding," he said. Burnham added: "So that's an example of something I think was right."
Political hurdles and the 2024 manifesto
However, the Prime Minister acknowledged that any concrete proposals would face a difficult path. He noted that voters would rightly question whether such changes were consistent with the 2024 election manifesto, in which no commitment to a full revaluation was made. "If I was to bring forward any changes people would rightly say 'is this consistent with that (2024) manifesto?' so there are big decisions ahead," he said.
The comments signal that the government is actively considering options for council tax reform, although no formal announcement has been made. Political analysts suggest that a revaluation would be a highly controversial move, potentially punishing homeowners in areas where property prices have risen fastest, particularly in London and the South East. In contrast, those in regions with slower growth, such as parts of the North East and the Midlands, might see their bills fall.
What could change for households
Under the current rules, the same Band D charge applies across a local authority, but the underlying value of homes in that band varies widely. A band D home in Greater Manchester might be worth considerably less than a band D home in a wealthy London borough, yet the council tax per property is often higher in the North West because local councils rely more heavily on council tax to fund services. This inverted relationship is at the heart of Burnham's critique.
Revaluation would aim to equalise this imbalance, but the practical consequences are huge. The government would need to update the valuation database for millions of properties, a task that has been avoided by successive governments since 1991. A revamped system might also introduce new bands, or even entirely different calculation methods, such as a proportional property tax rather than fixed bands.
Reaction and next steps
Housing and local government experts have reacted cautiously, pointing out that any change needs to be carefully managed to avoid financial shocks. Some have suggested that a revaluation could be phased in gradually, with caps on annual increases, while others argue that a full revision is long overdue. Consumer groups have urged the government to be transparent about winners and losers before any legislation is introduced.
For now, Burnham's remarks are the clearest indication yet that the new administration intends to take on the council tax system. With the issue now firmly on the political agenda, residents across the country will be watching closely to see whether the promised fairness leads to real change, and what that will mean for their own bills.
