South Ham District Council has also decided to keep car parking charges at current levels.
The moves take place despite the confirmation in the local government financial settlement that South Hams' grant will increase by only 0.5% next year.
The council has decided to freeze parking charges instead of passing on the reduction in VAT announced in last week’s Pre Budget report.
It said the expense and technical difficulties of altering pay and display machines to cater for the cut would not be cost effective.
Council leader John Tucker (Con) said: “We have the well-being of all our residents at heart whilst seeking ways of helping those who are experiencing financial problems.
"The council is facing severe budget pressures not least because of reduced income and a derisory Government Grant settlement but we are doing what we can to ease the demands on council taxpayers’ income.
“There is no doubt that there will be difficult times ahead and it is doubtful this course of action could be sustained over a longer period.
"The step of freezing our council tax for next year we hope will help people to regain control of their finances and bring a little stability to what is a very difficult economic period.”