27th September 2026
A recent article from the Resolution Foundation asked an intriguing question about council tax in England: "My council tax is suspiciously cheap."
It is a good question to ask in Scotland too.
The Scottish council tax system has a feature that can easily be forgotten. Your home's council tax band is still based largely on what the property was estimated to be worth on 1 April 1991.
That was 35 years ago.
Since then, property prices have changed dramatically and, importantly, they have not changed by the same amount everywhere.
A house that was relatively modestly priced in 1991 may now be worth several times as much. Another property may have experienced much less growth. Yet both can still be assessed using the same 1991 starting point.
The Scottish Government itself has commissioned research into whether the system should be reformed.
Read the Resolution Foundation's article
My council tax is suspiciously cheap
Your house isn't taxed according to what it is worth today
Under the current Scottish system, properties are placed into one of eight bands, from A to H, according to their estimated market value in April 1991.
The thresholds are surprisingly low by today's standards.
A Band D property, for example, was valued between £45,001 and £58,000 in 1991.
Band G covered properties worth between £106,001 and £212,000, while Band H covered properties worth more than £212,000.
Those figures are not today's property values. They are the values used to establish the bands more than three decades ago.
That creates an obvious problem.
A property worth £250,000 today and another worth £500,000 today may both be in Band H.
The council tax system does not distinguish between them simply because their present-day market values are different.
Scotland's own research highlights the problem
This isn't simply an argument being made by newspaper commentators or think tanks.
The Scottish Government commissioned the Institute for Fiscal Studies to examine the potential for council tax revaluation and reform.
Its findings point out that the current system has remained based on 1991 property values, while the relationship between property values and council tax has become increasingly uneven.
The Scottish Government says properties in Band H were worth at least eight times as much as Band A properties in 1991, but the Band H council tax charge is only 3.675 times that of Band A before discounts.
It describes the result as regressive in relation to property value because higher-value properties pay a smaller proportion of their value in council tax.
There is another problem.
The bands are quite wide, particularly towards the top.
That means two properties with relatively similar values can sometimes fall on opposite sides of a band boundary and consequently face noticeably different council tax bills.
And there is a second variation: where you live
The band is nationally determined, but the actual amount paid also depends upon the council area.
Each Scottish local authority sets its own Band D rate.
The other bands are then calculated from that figure using nationally determined ratios.
Consequently, two otherwise similar properties in different parts of Scotland can have different council tax bills simply because they are covered by different councils.
The Scottish Government's research found that in 2025-26 Band D charges ranged from £1,379 in South Lanarkshire to £1,666 in Midlothian.
That doesn't necessarily mean that one council is charging too much and another too little.
Local authorities have different spending requirements, populations, property structures and sources of income.
But it does demonstrate that council tax isn't a simple national property tax.
Highland is part of this picture
For households in Caithness and across the Highlands, the question is particularly interesting.
Highland Council sets its own Band D rate, which then determines the charges for the other bands in the area.
But the underlying valuation of the property remains tied to 1991.
That produces some interesting consequences in an area where property values can vary considerably between locations.
A house in a rural community, a coastal property and a house in a larger town may have experienced very different changes in value since 1991.
Yet their council tax bands are still rooted in that same historical valuation exercise.
And, of course, Highland Council has the same rising costs as other councils for services such as roads, social care, waste collection, education and housing.
This is why council tax reform is about more than simply deciding whether individual householders are paying too much.
It is also about finding a sustainable way of funding local government.
Scotland has already changed the system once
There has been some reform.
In 2017, Scotland increased council tax for properties in the higher bands, particularly E to H.
The ratios were changed so that higher-banded properties pay considerably more in relation to Band D than they did under the original system.
But that did not change the underlying valuations.
The house is still being assessed according to its estimated value in 1991.
Now Scotland is going to create two new bands
The Scottish Government has decided to introduce two new high-value council tax bands from 1 April 2028.
Band I will cover properties valued between £1 million and £2 million.
Band J will cover properties worth more than £2 million.
Unlike Bands A to H, these new bands will use current property values, based on values at 1 April 2026.
The change will therefore involve a targeted revaluation of properties worth more than £1 million.
Properties below that level will remain on the existing 1991 valuation system.
The Scottish Government says fewer than 1% of households will be affected.
That means the reform is deliberately targeted at the very top of the property market rather than being a general revaluation of Scottish homes.
But that leaves the big question unanswered
What about everybody else?
A property worth £300,000, £400,000 or £500,000 today can still be sitting in a council tax band determined by its estimated value in 1991.
The Scottish Government is currently considering the wider future of council tax and has already published research examining options for revaluation and reform.
The question is whether Scotland eventually decides that the entire system needs to be brought into the 21st century, rather than simply adding two new bands at the top.
There is an obvious political difficulty.
A full revaluation could produce substantial changes in council tax bills, with some households paying considerably more and others potentially paying less.
That makes reform much more difficult than simply announcing that very expensive homes should pay more.
It would create winners and losers across Scotland.
So is your council tax too cheap?
Perhaps.
Or perhaps you are paying more than another household with a property of similar current value.
The point is that we cannot tell simply by looking at today's house price.
That is because Scottish council tax isn't really a tax on what your house is worth today.
It is a tax based partly on what the house was estimated to be worth 35 years ago, combined with the council's own tax rate and the national banding rules.
That may have made sense when the system was introduced.
But after 35 years of very different property-price movements across Scotland, the question is becoming harder to avoid.
Scotland is now taking a first step by introducing Bands I and J for the most expensive properties.
The much bigger question is whether, eventually, the rest of the council tax system will also need to be reassessed.
Everyone needs to pay attention to more possible changes coming as the levels for band will have affects on every property.