If there is one thing Mount & Blade II: Bannerlord does surprisingly well, it is making you feel like a medieval ruler who has just inherited several castles, three very unhappy towns, and a treasury held together by optimism.
At first, taxes seem simple. Own a settlement, collect money, spend that money on troops, repeat. Then suddenly your town has negative loyalty, the militia is refusing to cooperate, your villagers are being robbed every ten minutes, and your income has dropped harder than a Vlandian crossbowman after forgetting his shield.
Taxes in Bannerlord are not really a separate system. They are tied into settlement prosperity, loyalty, security, village production, governor perks, kingdom policies, and whether your peasants can actually reach the market without being mugged by looters.
Here is how to make the system work in your favour.
How Taxes Work in Bannerlord
Every town and castle generates income through taxes. The exact amount depends mostly on:
- Prosperity
- Loyalty
- Security
- Village hearths
- Buildings and projects
- Governor perks
- Kingdom policies
- Trade disruptions and raids
Towns are your main source of tax income. Castles bring in less money but can still be useful if their villages are productive.
A prosperous town with high loyalty and secure villages can easily generate several thousand denars per day. A miserable frontier settlement with burning villages and 18 loyalty usually produces roughly enough money to buy one loaf of bread and a prayer.
Prosperity Is Basically Your Tax Multiplier
Prosperity is the biggest factor affecting taxes. The richer and larger a settlement becomes, the more income it produces.
A town with 7000 prosperity will earn dramatically more than one sitting at 2500. If you want better taxes, your first job is not squeezing peasants harder. It is making the settlement richer.
You can increase prosperity by:
- Protecting villages from raids
- Keeping food stocks positive
- Building aqueducts and marketplace upgrades
- Encouraging caravan traffic
- Winning wars nearby so villagers are not constantly fleeing for their lives
The Marketplace building is particularly useful because it directly boosts tax income. Aqueducts help prosperity grow faster over time.
There is a slightly absurd cycle in Bannerlord where a rich town gets richer because it already has money. Once you get a settlement stable, prosperity snowballs quite quickly.
Loyalty Matters More Than You Think
You can have a wealthy town and still earn disappointing taxes if loyalty is low.
Low loyalty reduces tax efficiency and can eventually trigger rebellion. Bannerlord loves to lull you into a false sense of security with a new settlement that looks profitable for about four days before the locals decide they would rather set everything on fire.
This usually happens when:
- The settlement culture does not match your own
- You chose harsh kingdom policies
- Security is low
- You installed the world’s least qualified governor
To improve loyalty:
- Assign a governor with the same culture as the settlement
- Build Fairgrounds
- Avoid policies that hurt loyalty
- Complete settlement issues for villagers and notables
- Keep food stocks positive
Fairgrounds should often be your first building project in newly conquered towns. Yes, a marketplace sounds more exciting. No, you cannot collect taxes from a city that has just declared independence because everybody hated you.
Security Protects Your Income
Security affects both loyalty and taxes. A town with low security earns less money because trade slows down and villages become easier targets.
You can improve security by:
- Leaving a decent garrison in the settlement
- Hunting nearby bandits and looters
- Preventing enemy raids
- Building the Militia Grounds and Training Fields
There is a balance here. A huge garrison increases security, but it also costs a fortune in wages. New players often fill a town with elite troops, feel very clever for about a week, then realise their garrison costs more than the settlement actually earns.
A solid mix of militia and a moderate garrison usually works better.
Villages Are Quietly Doing Most of the Work
Each town and castle is linked to nearby villages. These villages produce food and goods, which feed into your settlement’s economy.
If villages are raided, your tax income drops immediately.
A settlement with three thriving villages can be extremely profitable. The same settlement with two burned villages and one permanently under attack turns into an expensive medieval liability.
To protect village income:
- Patrol around your villages regularly
- Defeat raiders before they attack
- End wars quickly if your land is exposed
- Build roads and infrastructure where possible
Village hearth growth also matters. Larger hearth numbers mean villages produce more, which eventually means more taxes.
The Best Buildings for Increasing Tax Revenue
When upgrading a settlement, these are usually the best building priorities for tax management:
| Building | Why It Matters |
|---|---|
| Fairgrounds | Improves loyalty and prevents rebellion |
| Marketplace | Directly increases tax income |
| Aqueducts | Raises prosperity growth |
| Granary | Prevents food shortages |
| Militia Grounds | Improves security without expensive troops |
| Orchards | Helps food production and stability |
In newly conquered settlements, the usual order is:
- Fairgrounds
- Granary or Orchards if food is low
- Marketplace
- Aqueducts
It is not glamorous. You are not building a giant statue of yourself or an enormous war hall. You are fixing roads, keeping people fed, and trying to stop everyone from rioting. Medieval government, unfortunately, is often just paperwork with swords.
Governor Perks That Improve Taxes
Governors can massively affect settlement income.
The best governors usually have high Steward, Charm, or Trade skills. Certain perks directly increase tax income, prosperity, loyalty, or village production.
Useful perks include:
- Steward perks that improve tax collection
- Trade perks that boost settlement income
- Charm perks that increase loyalty
- Engineering perks that speed up building projects
A governor with matching culture and strong Steward can transform a struggling settlement surprisingly quickly.
For example, placing an Empire governor in an Imperial town avoids the culture penalty and usually gives you much better long-term income.
Kingdom Policies That Affect Taxes
Several kingdom policies change tax income and loyalty.
Some of the most useful include:
- Royal Guard, if you want a larger personal party and more military flexibility
- Forgiveness of Debts, which increases loyalty in towns
- Tribunes of the People, which also improves loyalty
- Sacred Majesty, if you can handle the influence cost
Policies that increase taxes at the expense of loyalty often look tempting. They are usually a trap unless your kingdom is already extremely stable.
Making slightly less money from a town that stays loyal is far better than making slightly more money for two weeks before it explodes into rebellion.
Why Your Taxes Suddenly Dropped
If your income crashes, check these first:
- Villages have been raided
- Food is negative
- Loyalty has fallen below 40
- Security is low
- The settlement is under siege pressure
- Caravans are no longer visiting
- Your governor was removed or captured
Bannerlord rarely gives you one single reason. It tends to pile several problems together until your economy looks like it has been hit by a trebuchet.
The easiest fix is usually:
- Restore food
- Increase loyalty
- Protect villages
- Remove bad governors
- Stop fighting three wars at once
That last one is particularly important. Running an empire across half the map sounds brilliant until every village you own is being raided simultaneously by people who are somehow travelling faster than your army.
The Best Settlements for Tax Income
Some settlements are naturally stronger than others because they have better villages, trade routes, or central locations.
Among the best money-making towns are:
- Sanala
- Marunath
- Epicrotea
- Ortysia
- Quyaz
- Lageta
These settlements often become extremely wealthy because they are connected to several productive villages and major trade routes.
entity[“video_game”,”Mount & Blade II: Bannerlord”,”2022 strategy RPG”] players often discover that owning Sanala feels less like managing a town and more like printing money with extra steps.
Takeaway
The secret to handling taxes in Bannerlord is realising that taxes are really a symptom of everything else.
If your settlements are loyal, secure, prosperous, well-fed, and protected, the money will come naturally. If your towns are starving, culturally furious, and surrounded by bandits, no amount of tax policy is going to save you.
Bannerlord has a very medieval view of economics. Prosperity comes from stability, roads, food, and people not being constantly stabbed on the way to market.
Slightly disappointing, perhaps, if you were hoping to solve everything by yelling “raise taxes” from a castle balcony. Still, your peasants will probably appreciate the effort.
