The increase means owners of an average Band D property face an additional charge of around £9.70 for services in the coming 12 months.
However, bills are likely to rise even more when anticipated increases from district and county councils – along with Lincolnshire’s Police Authority – are added in.
One source told the News that the bill for a Band D property could increase by more than £50 at a time when many people are facing crippling cuts to frontline services.
Some residents have slammed the scale of the increases as ‘ridiculous’.
The Town Council has raised its precept – the amount it needs to cover costs and deliver services – from £124,000 to £142,490.
The additional money will help pay for two new members of staff – one full-time and one part-time.
Coun Jonathan Ferrari said the council had not significantly increased its precept for the last six years.
He said: “Everyone is aware there is a shortfall in what (services) the district and county councils are going to provide.
“The figure we have come up with is the absolute minimum to make sure we can deliver the services that mean people can have pride in our town. We are making sure the grass is cut, the weeds are cleared...”
Coun Ferrari said the Town Council might have to take on even more services, depending on decisions by district and county councils who are battling to save millions of pounds.
The town council must also foot the bill for a new cemetery with the current facility on Boston Road close to being full.
Coun Ferrari stressed the council must also cover the cost of training staff with a two day course of how to use a chainsaw costing £500.
Resident Ian Wilson (36) said: “I appreciate the town council faces more work because the of the massive mess the district and county council have got themselves in.
“I feel sorry for the town council because if they don’t do it, the town will go to ruin.
“However, a 20-odd% rise is difficult to justify.”
Alison Jones (42) added: “What are we getting for our money?
“Buses are being axed, libraries closed, schools cut back and hospital full to bursting.
“The only thing we’ve got more of these days is pot-holes!”
Writing on the Horncastle News Facebook page, Carl Moore said: “Ridiculous! People are struggling to live as it is. Where is our council tax going exactly?”
Unlike county and district councils, the amount town and parish councils can increase council tax bills is not capped by Whitehall.
• East Lindsey District Council is proposing a £4.95 (3.9%) increase for 2017/18 – an extra 9.5p per week for a Band D property.
The County Council and the police have yet to finalise their figures.
Meanwhile, town councillors in Louth are recommending a 4.7% increase on a Band D property but say they will not take on some of the responsibilities that Horncastle is - including grass cutting which would have cost Louth an additional £20,000 a year.