Some Lancashire households are paying too much council tax and others too little, new data analysis has shown.

A recent investigation by the Financial Times found “anomalies” in the system that mean that the majority of all houses sold in England are now in “the wrong council tax band”.

That was the case for 55 percent of the homes that changed hands between January 2024 and October 2025.

It means modest homes can end up attracting bigger bills than mansions - both as a proportion of the property's value and in terms of the raw amounts paid, the paper discovered.

The discrepancies stem from the fact that the ‘bands’ that determine how much individual households are charged are based on property valuations that date back to 1991 - and have never been comprehensively updated.

As a result, the banding has become increasingly disconnected from house prices over the decades, because “properties do not change band when their value moves”, the paper said.

The bands run for A to H - the lowest-valued properties at 1991 rates through to the highest.

Council tax was introduced in 1993 as a hastily-arranged replacement for the controversial poll tax, which sparked riots in some parts of the country such was its unpopularity.

The Financial Times investigation highlighted the situation in Burnley, where, even though the majority of households are in the lowest band, A, the average household pays £1,337 a year in council tax - equivalent to 4.5 per cent of the median annual gross salary for the town and 1.1 per cent of the average local house value.

In London’s affluent Westminster district, however, the average household pays just £1,057 in council tax annually, equivalent to 0.11 per cent of the average house price.

You can see how council tax bands and house valuations align in your part of Lancashire by using the tool embedded in the article here.

‘Absurd system’

“It is pretty outrageous that we base council tax on property values from 1991 — if we did that for income tax everyone would realise it is obviously absurd to have a tax base that out-of-date,” Helen Miller, director of the Institute for Fiscal Studies thinktank, told the Financial Times.

A spokesperson for the Ministry of Housing, Communities and Local Government said: “We have no plans to change council tax bands, however we will make council tax fairer for taxpayers and local authorities.

“That’s why we are exploring changes to modernise the system and reform the challenge process, allowing people to dispute their bills more easily and save money.”

At the budget in November - after the Financial Times investigation was completed - the government announced it is introducing a High Value Council Tax Surcharge (HVCTS) in England for residential properties worth £2m or more, from April 2028. This charge will be based on updated valuations to identify properties above the threshold and will be in addition to existing council tax.