Buckingham Palace is subject to council tax and business rates

A claim circulating in news outlets and on social media that Buckingham Palace pays less council tax than most English households is missing important context. In addition to council tax the palace is also subject to over £800,000 in business rates.

The claim was widely shared

An article in The Economist, published on 25 January, states: “Buckingham Palace, valued at around £1bn, sits in band H and is charged £1,828 by Westminster City Council, less than an average three-bedroom semi in Blackpool. In fact this year 46% of households in England will receive a bigger council-tax bill than the Palace.”

The claims were shared multiple times on Facebook and X (formerly Twitter) in February, and also repeated by other media outlets, including The Guardian and The Evening Standard, in a graphic by WalesOnline, and by the director of the Institute for Fiscal Studies (IFS), Paul Johnson.

The headline of an article in the Daily Telegraph published on 2 February also says: “Nearly half of homes pay more council tax than Buckingham Palace” and the subheading claims that the King’s Westminster residence is charged the band H council tax rate of £1,828 a year. 

However, this statement in isolation, as well as those in other news outlets and on social media, is missing context about the rates and charges paid by the palace. 

Buckingham Palace is subject to local taxes

It’s correct to say that part of Buckingham Palace, the ‘Royal Residence’—the part of the palace in which the King and Royal family live—is subject to council tax.

However, as stated further in the same Telegraph article, the rest of the main body of Buckingham Palace is not subject to council tax, but rather business rates. This was not stated in The Economist report.

Westminster City Council, the body responsible for collecting council tax, told Full Fact that the main part of the palace is in the ‘non-domestic valuation list’. This means it is also charged business rates.

A spokesperson confirmed to us that the rateable value (how much it would cost to rent the property for a year) of Buckingham Palace is £1.676 million, with the total amount payable in the 2023/24 financial year set at £891,632.

The news articles have also incorrectly stated that this year’s Westminster City Council band H tax bill was £1,828, when it was very slightly lower at £1,824.10 for 2023/24.

In a statement from the editorial team, the Economist told Full Fact: “We could have been clearer that Buckingham Palace pays business rates on its non-residential part. But the fact that the residential part of a building in the heart of London, with vast gardens and all its other amenities, pays such a small band H council-tax charge still demonstrates the absurdities of the system.”

After we got in touch, the Guardian updated its piece to clarify that the palace is also subject to business rates.

David Phillips, Associate Director at the IFS told us: "The median property in England is a band C property, and the average band C council tax rate across England is £1,836. 

“The Royal Residence at Buckingham Palace—the part used as a residence rather than for official business—is a Band H property, which given Westminster's council tax rates, means a standard tax rate of £1,828."

Which parts of Buckingham Palace pay council tax?

Buckingham Palace has served as the official London residence of the UK’s sovereigns since 1837 and today is the administrative headquarters of King Charles III.

The Royal Residence in Buckingham Palace—the part of the palace where the sovereign, formerly Queen Elizabeth II and now King Charles III and their family live—is in band H, the highest council tax band in England. 

Westminster City Council confirmed to us that a number of other properties within the palace complex and its grounds are residential units which also pay council tax.

There are two properties in the grounds—the Gardener’s Lodge and the Royal Lodge—with ‘Buckingham Palace’ in the address, and both are listed as band H.

Five other properties are listed as staff quarters located in the Royal Mews on Buckingham Palace Road, and have a mixture of F, G and H council tax bandings.

These are the Chief Clerks Apartment and the Surgery Flat, as well as three flats in the Crown Equerry’s House. The Royal Guard Room within the Royal Mews is also in band F.

Local councils set their differing annual tax rates, which in England can be increased by up to 2.99% in a year—or 4.99% for councils with social care duties. If the government grants permission council tax can be increased by more than five percent.

Band H properties in Westminster are charged council tax of £1,824.10 by the council with band G set at £1,520.09 and band F at £1,317.40. 

However, it is correct that the Westminster bill is lower than the council tax charged on most households in Great Britain in similar bands.

In a document outlining information about its council tax charges for the current financial year, Westminster City Council’s leader Councillor Adam Hug says the borough’s band D residents—the band taken as the average by local authorities—pay the “lowest council tax in the country”.

Council tax valuations are based on the price the property would have sold for on the open market on 1 April 1991 in England and Scotland and 1 April 2003 in Wales.

Band H properties in England are those that were valued at more than £320,000 in 1991.

Full Fact has also contacted the Daily Telegraph, the Evening Standard and Wales Online for comment and will update this article if we receive a response.

We have previously written about misleading information about the Royal Family, including the cost of the Queen’s funeral and a false claim that no British artists were due to perform at King Charles’s coronation concert.

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