Rother District Councillors unanimously agreed to the tax for an average band-D property be set at £164.32 at Bexhill Town Hall.
The district authority has frozen council tax every year since 2010 but leader Carl Maynard said Rother is ‘significantly cheaper’ than its neighbours.
“You may forgive me to contrast Rother District Council’s level of council tax with those neighbouring authorities, Eastbourne under Liberal Democrat control and Hastings under Labour control,” he said.
“You will see there chairman we sit very squarely at the bottom of the table and it’s quite nice to be at the bottom of the table for us as we are significantly cheaper than our neighbouring authorities.
“This is because of the prudent financial planning that’s been done by the officer team over the years and indeed members have been very diligent in making sure that our council tax is something that we’re all very keen to focus on.”
Cllr Maynard also said further savings are to be expected but they will be done in a ‘measured fashion’.
The extra £115,000 this should generate for the local authority was recommended by officers and supported by cabinet.
Bexhill mayor and Labour councillor Maurice Watson supported the increase and said residents could handle it with some ‘good housekeeping’.
“These are very difficult decisions which councillors have to make and we all know these decisions will have a profound effect on a lot of people who’ll have to pay more,” he said.
He added: “The challenges which lie ahead for this council, for example we will have to look at cutting services, but with planning and development and good housekeeping, this will the council towards its core aims.”
Lead member for finance, resources and value for money Lord Ampthill said the council had ‘a duty’ to set a balanced budget and the ‘overwhelming majority’ of respondents to the consultation supported the increase.
Liberal Democrat councillor Sue Prochak congratulated the ruling Conservatives for the rise but wished they had done so earlier as she said the freeze had left a low council tax base.
Fellow Liberal Kathryn Field said the council would be £36,000 better off had it increased tax last year which could have paid for two employees to improve the services it provides.
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