Every home in Wales will have to be re-valued to update council tax levels.

The Welsh Assembly Government has announced the first review of tax bands since 1991, the results of which will reflect wide variations in property prices.

It is thought around a fifth of Wales' 1.3m households will have to pay more under the proposals, which come into force in April, 2005, but some will end up paying less.

Current bills are based on house valuations which are more than 10 years old.

Hot property: Price rises will be reflected

Assembly Finance and Local Government Minister Edwina Hart took the decision to launch a consultation paper on revising the 1991 valuations, which were felt to be very much out of date.

The core of the system - based on a 50% personal tax and 50% property tax - will not change.

The minister said new tax bands would be created to reflect the changes to the current A to H band system.

All the proposals are the result of a collaborative process Edwina Hart, Assembly Finance Minister

Homeowners in band H pay three times as much as those in band A.

"This will be the first time that such a council tax revaluation and rebanding has been undertaken anywhere in the UK." said Mrs Hart.

"It is further evidence that the Welsh Assembly Government is making maximum use of its powers.

"As I have acknowledged in the consultation paper, all the proposals are the result of a collaborative process and another example of the Assembly Government working in partnership with those who operate the system on the ground."

Plaid Cymru, which has sought the principle of both a new higher and lower band, welcomed the decision to review the system.

Wales is the first area of the UK to modernise the home banding system and Mrs Hart says it has more to do with fairness to all homeowners than bringing in more tax.

An independent body, the Valuation Office Agency (VOA) will carry out the revaluation and rebanding exercise, the assembly confirmed.

The council tax was born out of widespread dissatisfaction with its predecessor, the poll tax, which prompted protests in Scotland and Wales leading to it being scrapped.

A report to the Welsh Assembly in 2000 showed that since 1993, the average band D payment in Wales had more than doubled in seven years from �328 to �669.