More than 700,000 households face a second wave of major increases in their council tax under “brutal” proposals being proposed by Scottish ministers and local authorities.

Those in the most expensive Band H properties could see their bills increase by 22.5%, or around £740, from next year, if the proposals are put into effect.

One in four properties could see their bills rise as a result of the way the tax is calculated - even before their local council had imposed its annual hike.

The Scottish Tories called the plan “outrageous”, especially given the cost-of-living crisis.

The plan, which would raise £177m for cash-strapped councils, was included in a leaked paper by the council umbrella group Cosla, which was reported by the Daily Record.

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It reveals discussions of a joint group chaired by ministers and council figures on tax reform.

Under the plan, the ratios between the eight council tax bands, known as multipliers, would be changed to increase the charge for the most expensive bands E to H. 

These were changed in 2017, raising Band E by 7.2%, Band F by 12.5%, Band G by 17.5% and Band H by 22.5%

The proposal is to raise the bands by the same amounts again for 2024/25, leading to cumulative multiplier hikes in Bands E to H of 15, 27, 38 and 50% respectively.

The leaked paper states: “Repeating the 2017 changes would mean Council Tax would increase by 7.5%, 12.5%, 17.5% and 22.5% for properties valuation bands E, F, G and H respectively if council tax rates remained unchanged.

“The average increases, at 2023/24 council tax rates, would be around £127, £281, £464 and £741 per dwelling in these bands respectively.”

In 2021, there were 349,550 Band E homes in Scotland, 207,107 in Band F, 133,223 in Band G and 13,861 in Band H.

The paper continues: “Changing multipliers is a quick means to shift the burden of Council Tax toward those who can afford to pay their fair share.

“This would result in additional revenue to Councils, as was the case in 2017 when similar changes were made. 

“An estimate based on a similar change this time could see Councils being able to raise an additional £177m.”

The paper says the changes would make council tax fairer.

The working group, which includes SNP public finance minister Tom Arthur and Scottish Green co-leader Patrick Harvie, has proposed a consultation on the idea.

People would be asked if multiplier increases should take place and at what level.

The Cosla paper says: “This consultation... asks for views on further changes to the multipliers that would further address the inherent unfairness of the present Council Tax.

“There is a further case for doing so because property prices rose 20% between January 2020 and January 2023 which will have the effect of adding to the regressiveness of Council Tax as the tax liabilities for higher value properties will become an even smaller percentage of the increased current value. 

“Changes that would make the Council Tax fairer would mean applying a more proportionate tax on this increased property wealth whilst in turn potentially providing additional revenues to contribute towards the delivery of local public services.”

The Cosla paper said the working group has also considered a revaluation of council tax bands, which are based on what a property would have been worth in 1991.

But it admitted that would take “significant work and resource” and “political appetite”.

The Scottish Government is separately looking at whether to create a new income tax raising bills on those earning between £75,000 and £125,140.

Tory MSP Miles Briggs said: “These brutal proposals will strike terror in the hearts of Scots householders – particularly against the backdrop of a global cost-of-living crisis.

“It’s outrageous and wrong that they should be asked to fill the huge black hole in council finances caused by year after year of chronic underfunding of local authorities by the SNP government.

“Rather than force councils to make impossible decisions over whether to slash local services, impose eye-watering tax hikes or come up with a mix of the two, Humza Yousaf needs to belatedly commit to the fair funding deal for local government that the Scottish Conservatives have long demanded.”

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Labour MSP Mark Griffin said: "The party that promised to scrap the council tax over 15 years ago is once more forcing councils to increase council tax rates in order to fill the financial black hole that the SNP created.

"In the middle of a cost of living crisis, SNP economic illiteracy is forcing bills higher for thousands of Scots while the government obsesses over independence.

"This eye watering proposed hike in council tax is the result of the SNP’s economic incompetence - it is Humza Yousaf's Liz Truss moment."

STUC general secretary Roz Foyer said: “Property values have increased substantially therefore it’s the correct course of action that the Scottish Government and Cosla are looking at increasing fairness with respect to property bands F, G and H.

“Whilst any further resource spending for local government is welcome, this would be a mere sticking plaster on the deep cuts inflicted on councils across Scotland.

“The Scottish Government and Cosla should act immediately to introduce rates review as a means of ridding us of an unfair council tax system in addition to property and wealth taxes.

“A tinkering of the system won’t cut it. Wholesale change and ambition is required; we just need a government who is prepared to show it.”

A Scottish Government spokesperson said: “The Scottish Government is committed to fairer, more inclusive and fiscally sustainable forms of local taxation.

“We have worked in partnership with Cosla through the Joint Working Group on Sources of Local Government Funding and Council Tax Reform, to explore proposals for meaningful changes to be introduced to Council Tax. 

“The group is considering a broad range of potential measures, which taken together will seek to provide fairness to the system.

“The Council Tax Reductions scheme continues to protect the most financially vulnerable, and regardless of the property band, nobody in Scotland will have to meet a council tax liability they cannot be expected to afford.”