As per Microsoft documentation VerticalContentAlignment does not work on the default template of text box.
To solve this we need our own style.
Adding binding verticalalignment to verticalcontentalignment of the template fixed the issue.
Here's the element i changed from the standard textbox style
<ScrollViewer x:Name="ContentElement" VerticalAlignment="{TemplateBinding VerticalContentAlignment}" Padding="{TemplateBinding Padding}" BorderThickness="0" IsTabStop="False"/>
Here's the complete style I used to achieve this
<Style x:Key="TextBoxWithVerticalContentAlignment" TargetType="TextBox">
<Setter Property="BorderThickness" Value="1"/>
<Setter Property="Background" Value="#FFFFFFFF"/>
<Setter Property="Foreground" Value="#FF000000"/>
<Setter Property="Padding" Value="2"/>
<Setter Property="BorderBrush">
<Setter.Value>
<LinearGradientBrush EndPoint="0.5,1" StartPoint="0.5,0">
<GradientStop Color="#FFA3AEB9" Offset="0"/>
<GradientStop Color="#FF8399A9" Offset="0.375"/>
<GradientStop Color="#FF718597" Offset="0.375"/>
<GradientStop Color="#FF617584" Offset="1"/>
</LinearGradientBrush>
</Setter.Value>
</Setter>
<Setter Property="Template">
<Setter.Value>
<ControlTemplate TargetType="TextBox">
<Grid x:Name="RootElement">
<vsm:VisualStateManager.VisualStateGroups>
<vsm:VisualStateGroup x:Name="CommonStates">
<vsm:VisualState x:Name="Normal"/>
<vsm:VisualState x:Name="MouseOver">
<Storyboard>
<ColorAnimation Storyboard.TargetName="MouseOverBorder" Storyboard.TargetProperty="(Border.BorderBrush).(SolidColorBrush.Color)" To="#FF99C1E2" Duration="0"/>
</Storyboard>
</vsm:VisualState>
<vsm:VisualState x:Name="Disabled">
<Storyboard>
<DoubleAnimation Storyboard.TargetName="DisabledVisualElement" Storyboard.TargetProperty="Opacity" To="1" Duration="0"/>
</Storyboard>
</vsm:VisualState>
<vsm:VisualState x:Name="ReadOnly">
<Storyboard>
<DoubleAnimation Storyboard.TargetName="ReadOnlyVisualElement" Storyboard.TargetProperty="Opacity" To="1" Duration="0" />
</Storyboard>
</vsm:VisualState>
</vsm:VisualStateGroup>
<vsm:VisualStateGroup x:Name="FocusStates">
<vsm:VisualState x:Name="Focused">
<Storyboard>
<DoubleAnimation Storyboard.TargetName="FocusVisualElement" Storyboard.TargetProperty="Opacity" To="1" Duration="0"/>
</Storyboard>
</vsm:VisualState>
<vsm:VisualState x:Name="Unfocused">
<Storyboard>
<DoubleAnimation Storyboard.TargetName="FocusVisualElement" Storyboard.TargetProperty="Opacity" To="0" Duration="0"/>
</Storyboard>
</vsm:VisualState>
</vsm:VisualStateGroup>
<vsm:VisualStateGroup x:Name="ValidationStates">
<vsm:VisualState x:Name="Valid"/>
<vsm:VisualState x:Name="InvalidUnfocused">
<Storyboard>
<ObjectAnimationUsingKeyFrames Storyboard.TargetName="ValidationErrorElement" Storyboard.TargetProperty="Visibility">
<DiscreteObjectKeyFrame KeyTime="0">
<DiscreteObjectKeyFrame.Value>
<Visibility>Visible</Visibility>
</DiscreteObjectKeyFrame.Value>
</DiscreteObjectKeyFrame>
</ObjectAnimationUsingKeyFrames>
</Storyboard>
</vsm:VisualState>
<vsm:VisualState x:Name="InvalidFocused">
<Storyboard>
<ObjectAnimationUsingKeyFrames Storyboard.TargetName="ValidationErrorElement" Storyboard.TargetProperty="Visibility">
<DiscreteObjectKeyFrame KeyTime="0">
<DiscreteObjectKeyFrame.Value>
<Visibility>Visible</Visibility>
</DiscreteObjectKeyFrame.Value>
</DiscreteObjectKeyFrame>
</ObjectAnimationUsingKeyFrames>
<ObjectAnimationUsingKeyFrames Storyboard.TargetName="validationTooltip" Storyboard.TargetProperty="IsOpen">
<DiscreteObjectKeyFrame KeyTime="0">
<DiscreteObjectKeyFrame.Value>
<sys:Boolean>True</sys:Boolean>
</DiscreteObjectKeyFrame.Value>
</DiscreteObjectKeyFrame>
</ObjectAnimationUsingKeyFrames>
</Storyboard>
</vsm:VisualState>
</vsm:VisualStateGroup>
</vsm:VisualStateManager.VisualStateGroups>
<Border x:Name="Border" BorderThickness="{TemplateBinding BorderThickness}" CornerRadius="1" Opacity="1" Background="{TemplateBinding Background}" BorderBrush="{TemplateBinding BorderBrush}">
<Grid>
<Border x:Name="ReadOnlyVisualElement" Opacity="0" Background="#5EC9C9C9"/>
<Border x:Name="MouseOverBorder" Background="White" BorderThickness="1" BorderBrush="Transparent">
<ScrollViewer x:Name="ContentElement" VerticalAlignment="{TemplateBinding VerticalContentAlignment}" Padding="{TemplateBinding Padding}" BorderThickness="0" IsTabStop="False"/>
</Border>
</Grid>
</Border>
<Border x:Name="DisabledVisualElement" Background="#A5F7F7F7" BorderBrush="#A5F7F7F7" BorderThickness="{TemplateBinding BorderThickness}" Opacity="0" IsHitTestVisible="False"/>
<Border x:Name="FocusVisualElement" BorderBrush="#FF6DBDD1" BorderThickness="{TemplateBinding BorderThickness}" Margin="1" Opacity="0" IsHitTestVisible="False"/>
<Border x:Name="ValidationErrorElement" BorderThickness="1" CornerRadius="1" BorderBrush="#FFDB000C" Visibility="Collapsed">
<ToolTipService.ToolTip>
<ToolTip x:Name="validationTooltip" Template="{StaticResource ValidationToolTipTemplate}" Placement="Right"
PlacementTarget="{Binding RelativeSource={RelativeSource TemplatedParent}}"
DataContext="{Binding RelativeSource={RelativeSource TemplatedParent}}">
<ToolTip.Triggers>
<EventTrigger RoutedEvent="Canvas.Loaded">
<EventTrigger.Actions>
<BeginStoryboard>
<Storyboard>
<ObjectAnimationUsingKeyFrames Storyboard.TargetName="validationTooltip" Storyboard.TargetProperty="IsHitTestVisible">
<DiscreteObjectKeyFrame KeyTime="0">
<DiscreteObjectKeyFrame.Value>
<sys:Boolean>true</sys:Boolean>
</DiscreteObjectKeyFrame.Value>
</DiscreteObjectKeyFrame>
</ObjectAnimationUsingKeyFrames>
</Storyboard>
</BeginStoryboard>
</EventTrigger.Actions>
</EventTrigger>
</ToolTip.Triggers>
</ToolTip>
</ToolTipService.ToolTip>
<Grid Width="12" Height="12" HorizontalAlignment="Right" Margin="1,-4,-4,0" VerticalAlignment="Top" Background="Transparent">
<Path Margin="1,3,0,0" Data="M 1,0 L6,0 A 2,2 90 0 1 8,2 L8,7 z" Fill="#FFDC000C"/>
<Path Margin="1,3,0,0" Data="M 0,0 L2,0 L 8,6 L8,8" Fill="#ffffff"/>
</Grid>
</Border>
</Grid>
</ControlTemplate>
</Setter.Value>
</Setter>
</Style>
Much help was obtained from another question