Almost 1000 residents in Bishopbriggs, East Dunbartonshire, may have paid too much for the past 20 years due to an error with valuation bands.
There are concerns that 994 houses in the Bishopbriggs South area may have been put on Band E instead of Band D when the tax was introduced in 1993.
If householders successfully challenge their banding they could each receive up to £5000 and the council will lose up to £275,000 in revenue every year.
The possible mistake was uncovered after an increase in the number of appeals over bandings in the area.
Bandings are the responsibility of the assessor for the Dunbartonshire and Argyll & Bute Valuation Joint Board.
Households which may be affected have been contacted by the Board who said, in a letter, that the reduction may not apply to homes which have been extended.
It adds: "In many cases an inspection of each property will be required before I am able to confirm if the council tax band is to be maintained or reduced.
"As a result my staff will need to inspect hundreds of houses.
"I have recently diverted staff away from other functions in an attempt to be proactive in amending bands without the need for appeal to be submitted, but the task will still take time and I would urge council tax payers who are affected to be patient as this process is carried out."
In a statement, Ian Black, director of finance with East Dunbartonshire Council, said on behalf of The Assessor for the Dunbartonshire and Argyll & Bute Valuation Joint Board: "The valuations are currently being carried out by the assessor and each property will be looked at individually.
"Around 1000 properties have potentially been affected by this issue. When the valuations have been carried out the assessor will then write to the householders explaining the outcome.
"If appropriate, the council will make a refund in due course."