Scottish council tax revaluation needed, says minister Ivan McKee
Every home in Scotland could have a revaluation of its value, to see if it still fits the council tax banding it has been in for as long as 34 years. Todays council tax valuations are based on property prices of 1991, when the average amount was about a quarter of its current level.Public finance minister Ivan McKee told BBC Radio Scotland's Good Morning Scotland programme that there was "absolutely a need for revaluation" and there would "be winners and losers".Re-valuation would put some homes into more expensive bands, while others could see cuts in council tax bills.
Replacing the council tax has long been an SNP ambition. The party's 2007 manifesto said the "unfair" tax should be scrapped for a local income tax.In 2014, former first minister Nicola Sturgeon set up a commission to look at alternatives.
The Scottish government has held ongoing talks for years with local government body Cosla, but revaluation had been seen as too politically painful to impose. McKee said it was "important to get a political consensus" at Holyrood. The public finance minister said: "There's absolutely a need for revaluation, and plans for that are being worked on just now. "That creates a lot of issues if people are changing the value of their property significantly in a very short period of time. "That's going to impact how you do the transition."
McKee said ministers were working on the details of revaluation with Cosla.He added: "The really important thing is that there is a consensus on this and we move forward in a way that everybody's signed up to."Something that's a more effective system."The reality of that is that there will be winners and losers, and that's really important to recognise."
Council tax is based on the estimated value of your home 34 years ago. The catch is that people's homes have changed in value relative to each other. Some neighbourhoods have seen prices rise much more steeply than others – for instance those that used to be more down-at-heel but now attract buyers from far and wide. It's sometimes called "gentrification".Where house prices have risen fastest, homes are likely to see a move up council bandings, so bills will go up. Where home valuations have not risen as steeply as the average, they could move down council bands. How much difference could this make? Unlike Scotland and England, Wales had a council tax revaluation in 2003. One in three homes moved up a band, and one in 12 homes moved down. Some moved by two bands. The experience was a painful one for the Welsh government, and it's avoided a further revaluation in the past 20 years.As Ivan McKee says, we have to recognise there will be winners and losers. But those who win tend to give ministers less thanks than the grief they get from the people that lose out.
McKee's comments came after the Scottish Fiscal Commission published an update to its economic forecasts on Wednesday.Among the documents published was a "meaningful and long-term" reform of council tax.The financial sustainability plan was made up of three areas;public spendingeconomic growthand taxationThe Scottish Government said it aims to reduce the public sector workforce by 0.5% each year for the rest of the decade.Finance Secretary Shona Robison said taking no action would result in a £4.7bn budget black hole by 2030.If left untreated, Robison told MSPs the gap between funding and day-to-day spending would top £2.6bn, while the capital deficit would grow to £2.1bn.The strategy was published in the final week of the Scottish Parliament's 2024/25 session.MSPs return to Holyrood in September, nine months out from the parliament's election on 7 May, 2026
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