Editor's Blog0 min ago
Council Tax Bands
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Why are they still calculated on what you house was worth in 1991? What happens to houses newly built - how they are calculated?
cheers guys
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cheers guys
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Each dwelling is allocated to one of eight bands coded by letters A to H (A to I in Wales) on the basis of its assumed capital value (as of 1 April 1991 in England and Scotland, 1 April 2003 in Wales). Newly constructed properties are also assigned a nominal 1991 (2003 for Wales) value.
The government had planned to revalue all properties in England in 2007 (the first revaluations since 1993) but, in September 2005, it was announced that the revaluation in England would be postponed until "after the next election". At the same time, the terms of reference of the Lyons Inquiry were extended and the report date pushed out to December 2006 (subsequently extended to 2007). In Wales, tax bills based on the property revaluations done using 2003 prices were issued in 2005. Because of the surge in house prices over the late 1990s and early 2000s, more than a third of properties in Wales found themselves in a band higher than under the 1991 valuation. Some properties were moved up three or even four bands with consequent large increases in the amount of council tax demanded. Some properties were moved into new Band I at the top of the price range. Only 8% of properties were moved down in bands.
Between the wholesale revaluations, a major change to a property (such as an extension, or some major blight causing loss of value) can trigger a revaluation to a new estimate of the value the property would have reached if sold in 1991. If such a change would result in an increase in value, then re-banding will only take effect when the property is sold or otherwise transferred.
The government had planned to revalue all properties in England in 2007 (the first revaluations since 1993) but, in September 2005, it was announced that the revaluation in England would be postponed until "after the next election". At the same time, the terms of reference of the Lyons Inquiry were extended and the report date pushed out to December 2006 (subsequently extended to 2007). In Wales, tax bills based on the property revaluations done using 2003 prices were issued in 2005. Because of the surge in house prices over the late 1990s and early 2000s, more than a third of properties in Wales found themselves in a band higher than under the 1991 valuation. Some properties were moved up three or even four bands with consequent large increases in the amount of council tax demanded. Some properties were moved into new Band I at the top of the price range. Only 8% of properties were moved down in bands.
Between the wholesale revaluations, a major change to a property (such as an extension, or some major blight causing loss of value) can trigger a revaluation to a new estimate of the value the property would have reached if sold in 1991. If such a change would result in an increase in value, then re-banding will only take effect when the property is sold or otherwise transferred.
The reason is that no government has been willing to face doing a revaluation - either because it would cost too much or because it is trying (inevitably in vain) to find a solution where there will not be (m)any losers
.. Some properties were moved up three or even four bands with consequent large increases in the amount of council tax demanded. ..
at least in theory that should lead to a reduction in the tax needing to be collected in the higher bands
Yes I did say in theory.......
A superficially attractive solution is that you declare the value yourself. If you undervalue the Council (or some other body) has the right to compulsorily purchase the property from you at that value
.. Some properties were moved up three or even four bands with consequent large increases in the amount of council tax demanded. ..
at least in theory that should lead to a reduction in the tax needing to be collected in the higher bands
Yes I did say in theory.......
A superficially attractive solution is that you declare the value yourself. If you undervalue the Council (or some other body) has the right to compulsorily purchase the property from you at that value
The absolute value of properties is not really a consideration. When the original valuations were done it was to establish relative values. So the owner of a more expensive property paid more than the owner of a cheaper property. Over the past twenty years it is unlikely that values of properties within the same geographical area have changed much relative to each other so a revaluation would not seem necessary. However property values in some parts of the country have increased at a far greater rate than in others and the idea of a revaluation was to gather more revenue from those who live in properties which have seen a greater increase.
Of course the whole philosophy behind council tax is unfair. It is a regressive tax which takes no account of ability to pay (except for those living on benefits or ultra low income). There is no reason on earth why a single elderly person living on a fixed income should pay more (even with their 25% single discount) that four adults living in a much smaller property. And please don’t say they should “downsize”. People should not have to move just to pay a grossly unfair property tax for which there is no justification.
Of course the whole philosophy behind council tax is unfair. It is a regressive tax which takes no account of ability to pay (except for those living on benefits or ultra low income). There is no reason on earth why a single elderly person living on a fixed income should pay more (even with their 25% single discount) that four adults living in a much smaller property. And please don’t say they should “downsize”. People should not have to move just to pay a grossly unfair property tax for which there is no justification.
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