Wales is facing a worsening council tax crisis as the total amount of unpaid bills has soared by 139% compared to pre-pandemic levels, according to official Welsh government data.
The figures reveal that council tax arrears have risen sharply every year since 2022, driven by the ongoing cost of living crisis, with a staggering £263 million now outstanding across Wales.
Gwynedd tops the list with the highest average overdue council tax of £373 per household, while Neath Port Talbot reports the lowest at £67. Under current regulations, missing a single monthly council tax payment can trigger severe penalties, including becoming liable for the entire annual bill after just two weeks.
Council Tax Arrears Surge Across Wales
Gwynedd Council, which had the lowest collection rate in Wales at just 93% for 2024-25, said it is reviewing its tax recovery processes. The shift of some self-catering holiday lets from cheaper business rates to standard council tax may have also influenced the figures.
In Bangor, residents shared their struggles with rising council tax bills. Rosemary, a pensioner from Pentir, said she had to move in with her daughter because she could no longer afford the payments on her pension. Others echoed her concerns, with many saying council tax has become unaffordable.
Council tax arrears for the 12 months to March reached £103 million, with an additional £160 million in unpaid debts from previous years, creating a total debt burden of £263 million for Welsh households.
Calls for Reform Amid Mounting Pressure
Council tax remains the main source of locally raised income for councils in Wales, based on property values last assessed in 2003. Although a revaluation was planned, it has been delayed until 2028, sparking frustration among residents.
Critics say council tax is a regressive system, disproportionately impacting low-income households. While the Council Tax Reduction Scheme supported over 258,000 households last year, many still struggle with payments. Discounts are available for some groups, such as single occupants and students, but these often fall short of covering rising bills.
Welsh Government Proposes Softer Rules for Non-Payment
The Welsh government has launched a consultation to reform council tax enforcement. Proposed changes include extending the period before full payment is demanded from two weeks to two months, and requiring better communication from councils over payment issues.
Finance Minister Mark Drakeford described the current rules as “too aggressive” and called for fairer policies to support struggling households.
Additionally, a pilot scheme in Merthyr Tydfil, Blaenau Gwent, and Newport is offering interest-free loans to help residents clear their council tax debt.
Political Divide Over Council Tax Reform
Opposition parties remain critical of the government’s approach. Plaid Cymru called the loan scheme a “sticking plaster” and accused Labour of abandoning full council tax reform.
The Welsh Conservatives pledged to introduce local referendums on tax rises above 5%, while the Welsh Liberal Democrats labelled council tax as “one of the most outdated and unfair taxes in the UK.” Reform UK also blasted councils for “wasting money” and demanded significant tax cuts.
What To Do If You Can’t Pay Council Tax
Debt charities urge residents not to ignore council tax bills, as they are considered “priority debts.” Struggling households should:
• Contact their council to arrange a repayment plan
• Apply for the Council Tax Reduction Scheme
• Check eligibility for discounts
• Seek free advice from charities such as Citizens Advice
The Wales council tax crisis shows no sign of easing, as arrears continue to climb under mounting financial pressures and delays in reform.
