Whether you’re renting a property or you own your own home, it’s likely you’ll have to pay council tax.
Council tax is collected by local authorities and it covers the cost of many things, including rubbish collection, libraries, policing, street lighting and road maintenance. It might be frustrating to fork out for something you don’t always see, but these are all things that enable us to have a civilised society.
There are exceptions and discounts when it comes to paying council tax – for example, if all the people living in a house are students, they won’t have to pay anything at all. You’ll also be entitled to a 25 per cent discount if you live on your own (or anyone else who shares your home with you is under the age of 18), and if a property is unoccupied, the homeowner will get a 50 per cent discount.
How much council tax you have to pay depends on what council tax band your property falls into (this is calculated based on its value) and where you live in the country. According to the latest data, people living in London have some of the cheapest council tax bills, with the amount varying from borough to borough.
Which London boroughs have the cheapest council tax?
Considering London is one of the most expensive cities in the world to live in, it’s surprising to learn that Westminster, Wandsworth, City of London, Hammersmith and Fulham and Kensington and Chelsea are actually some of the cheapest areas in the country for council tax.
At the other end of the scale, Rutland is the most expensive; with some residents spending a whopping £2,300 a year on their council tax bill.
Read on to find out more about council tax charges for people living in the average band D property in the five London boroughs mentioned above.
Top five London boroughs with the cheapest council tax
Not only does Westminster have the lowest council tax rates in London, but council tax bills here are cheaper than they are in most of the country.
Home to both the Houses of Parliament and Buckingham Palace, it’s an affluent place to live and an expensive place to buy property (average house prices in Westminster are around £1.7 million). However, that’s certainly not reflected in its council tax rates.
Residents living here in a council tax band D home are paying an average annual amount of £866 for 2022/233. This may be four and a half per cent more than last year, but it’s still classed as “Very low”.
Coming in second place for the London boroughs with the cheapest council tax is Wandsworth.
With sleek new builds, boutique shops and posh restaurants, it’s a relatively wealthy borough – which is apparent just from wandering around the areas of Balham, Battersea and Putney.
The average cost of a house here is around £884,500, however, the average council tax bill for a band D home is as little as £873 (up three per cent on last year).
3. City of London
The average price for a house in the UK is £281,000, but buying in the City of London will set you back a lot more than that. On average, properties here cost £953,500 – which is nearly three and a half times as much.
For City of London residents living in council tax band D properties, the council tax payable annually is only around £1,075. The cost has gone down by 18 per cent since last year, meaning it is now in the “Very low tax” category.
4. Hammersmith and Fulham
This borough is the fourth most expensive area of London, after City of Westminster, Wandsworth and City of London.
With the emergence of more property developments and professionals and young families wishing to put down roots outside of the city centre, it’s an increasingly desirable place to live – especially considering council tax here is so reasonable.
The average annual council tax bill for a band D house comes in at just £1,228, meaning this London borough falls into the “Low tax” category. That figure may have gone up by two and a half per cent since 2021/22 but it’s still nearly half what someone living in a council tax band D house in Rutland pays.
5. Kensington and Chelsea
With beautiful architecture steeped in history and magnificent residential properties that are home to celebrities, entrepreneurs and politicians, it’s no wonder house prices in Kensington and Chelsea soar high above the national average, at £2.5 million.
It may be one of the most prestigious places to live in London, however, council tax charges in this borough are again some of the cheapest in the country.
People who live in band D houses in this borough can expect their annual council tax bill to cost, on average, £1,382. Unlike some areas of the UK, where council tax rates have been frozen, the price has gone up since last year (by nearly four per cent), however that hasn’t made it any less affordable.
Why is council tax in some London boroughs so low?
These boroughs have prided themselves on being low-tax areas for a long time. But considering their notoriety for affluence, you might be confused as to how this is possible.
When council tax replaced the poll tax in 1993, the government set limits on what it could charge to ease the introduction of the new system, and this pattern of low taxes has remained since then.
Westminster councillors have also been quoted saying it’s because they realise tax increases hit poorer people hardest and that they strive to provide residents with value for their money.
People living in the City of London have actually seen a council tax reduction since last year, putting it into the “Very low tax” category. While the London boroughs of Westminster, Wandsworth, Hammersmith and Fulham and Kensington and Chelsea have seen a council tax increase of up to four and a half per cent since 2021/22, council tax bills in these places are still some of the lowest in the country.
That’s surprising considering the general affluence of these areas, however, government limits which were set in 1993 are still in place today, meaning they continue to remain low.