Short answer:
Because council tax is based on 1991 property values, adjusted by local council budgets — not on what your home is worth today or how much you personally use local services.
The number often feels arbitrary, but it isn’t random.
What council tax is actually based on
Every home in England and Wales is placed into a valuation band.
That band is based on:
- What the property would have been worth in 1991
- Not its current market value
- Not the price you paid
Each band has a fixed range.
Once a property is placed in a band, it usually stays there.
Why 1991 is still used
Council tax replaced the poll tax in the early 1990s.
Rather than revalue every property regularly — which is politically and administratively difficult — the original valuations were kept and adjusted using multipliers.
As a result:
- Relative differences matter more than absolute prices
- Two houses worth very different amounts today may still sit in the same band
This is why council tax often feels disconnected from reality.
Why similar houses can pay different amounts
Even if two homes look similar, council tax can differ because of:
- Small differences in estimated 1991 value
- Extensions or changes made after that date
- Boundary changes between council areas
Once a band is set, it tends to persist unless formally challenged.
The role of the local council
The band sets the framework.
The council sets the bill.
Each local authority:
- Sets its annual budget
- Applies a multiplier to each band
- Includes charges for services like police and fire authorities
This means:
- The same band costs different amounts in different areas
- Increases reflect local funding needs as well as national policy
Why it feels high even if services feel limited
Council tax does not work like a usage fee.
It funds:
- Statutory services
- Long-term obligations
- Social care
- Legacy costs from previous years
You are paying into a shared system, not buying a menu of services.
That disconnect between payment and visible benefit is a major source of frustration.
Can the band be wrong?
Yes, but changes are uncommon.
A band may be incorrect if:
- Comparable nearby properties are clearly in a lower band
- The original valuation was inconsistent
- The property was wrongly assessed at the start
Challenges are possible, but they must be evidence-based and are not always successful.
The practical takeaway
Council tax feels high because:
- It is anchored to outdated valuations
- It varies by local budget, not personal circumstance
- It funds obligations you may not directly see
Understanding this doesn’t reduce the bill, but it explains why it often feels unfair or opaque.
One simple next step
If your bill seems unusually high:
Check your band against similar nearby properties.
That’s the only meaningful first step before considering a formal challenge.
Council tax is a blunt instrument.
Its stability comes at the cost of precision.