council tax revaluation

Bogof_Babe

Can anyone confirm that the value bands are also being amended in line with the overall increased property prices over the last decade?

For example, our Band E rate was based on the 1991 assumed value of £88K or thereabouts (that being what we paid for the house in 1988).

If the cost/value levels stay the same, but are based on 2005 selling prices, we will be practically off the scale, as our house, like most others in this locality, would now be worth over £200K, were we to sell it today. You can barely get a one-bed flat round here for £80K now.

That would put us straight into band G or even H, if based on the original 1991 values.

So are the value levels being adjusted alongside the individual homes bandings?

theGrinch

I just cant believe the bands will stay the same, but what I do believe is a government fiddle. first they will confuse the issue to cloud back door tax rises. the motive would be to cut central government grants.

dippy

And on the matter of government grants to the councils, we all know here whether Gordon Brown has a huge surplus or a huge deficit on his hands for the new budget.

dippy

Here you go:

COUNCIL TAX NIGHTMARE FOR MIDDLE CLASS SCOTS
http://news.scotsman.com/index.cfm?id=325952005

THOUSANDS of Scots homeowners face massive council tax hikes under Labour plans to introduce higher rates for the most valuable properties.
Scotland on Sunday can reveal that Labour wants at least one new charging band to be created at the top end of the market, a move which independent analysis suggests could leave homeowners with an annual council tax bill in the region of £3,000.
The proposals - which could add £1,000 to current bills - have been ordered to ensure that Scots who have benefited most from the house price explosion pay their fair share towards local services.
But the details will not be confirmed until after the general election, leaving Labour open to fresh claims that it is planning to fleece the middle classes. …

Ted_Hutchinson

ministers are determined to say as little as possible about council tax rebanding this side of the election Times Article.

Altarf

http://www.voa.gov.uk/council_tax/ct-reval-2007/feb-2005-briefing.shtml

The issues that will cause problems are:

- Houses that have increased in value to a greater extent than others in that local authority area.

- An increase in the spread of regional variation of house prices.

- Changes to the banding structure.

- How the government works out how much to give to local authorities.

Currently the council tax is based around band D with houses higher or lower paying a percentage more or less council tax. i.e. a band D house pays 100% of the set tax, a band A pays 67% and a band H pays 200% Band D is supposed to be the average house price, which in 1991 for England was £68,001 to £88,000.

When Wales was revalued, band D was changed from £51,001 to £66,000 up to £91,001 to £123,000. If the same was used for England then this would equate to £121,000 to £164,000 which although may be the average across the country, it would certainly not be the average for the south east. This would mean that properties in the south east would be skewed towards the higher bandings.

Now this may not cause a problem unless the government changes its formula for calculating how much it gives the local authority, as the council tax banding is just a crude way of trying to make the payments a bit fairer. As the local authority *should* only need the same amount of money before and after the revaluation, then if everybody's bandings in a local authority area's move upwards together, then they still pay the same amount.

Except... at the moment there is a ceiling at band H (£320,001 and above in England), which would mean that in some areas a significant proportion of the houses would be in band H. This would have the strange effect if the council left the band D rate the same it would collect too much money, so it *should* reduce the band D rate to compensate for this (and pigs will fly at the same time). This is what is going to lead to council tax bills going up.

Again in Wales, when they revalued to help solve this issue, as well as increasing H from £240,000 and above (£320,001 and above in England) they added an additional band I at £424,000 and above. As band I is 233% of the band D figure, people who are currently well into band H (and thus would move to band I) are certainly going to be losers as they will move from 200% to 233%.

Band I in England would work out to be about £565,000 and above if you based it on the same as the Welsh figures. However to cope with some areas in England you would need J and K as well.

waterbaby

The fact that your income isn't necessarily related to the size of your house means that the system of bands is quite unfair for some people.

My parents bought a 4 bedroomed detached on his salary in the late 80s, when he was the only earner. She began work about 6 years ago. Unfortunately he died last year. The Band D council tax is obviously aimed at a household income sufficient (at 1991 levels) to buy a 4 bedroomed house. But she earns less than half what he did - and shes still supporting my sister.

It's not like she uses the services that she's paying for either, as the household now uses half the amount of resources that it used to when me and my dad were there.

She doesn't want to move because of all the support and friends she has in the street. Luckily she is not a big spender at all, and gets by ok.

I take the point about income tax not being 'fair' because those who make a success of themselves pay more. But I don't think the council tax system has it cracked either.

MarkyMarkD

The VOA site says

Revaluation is not about increasing the amount of money raised overall from council tax - the Government is committed to ensuring that the overall council tax yield is not increased because of revaluation.

It is entirely obvious from the literature you get with your council tax bill what the total council tax "take" is - there's no way that the councils, or the government, can "sneak in" a huge increase without everyone knowing about it.

I believe that there will be marginal winners and losers. The most obvious losers will be those with VERY expensive houses, if there are additional bands added at the top of the system, but that will in turn slightly benefit those in more normal bands.

I am certain that almost everyone will only move by one band, up or down, or stay the same. The exceptions will be those who have profited hugely from house price movements (if they've been living there all the time) or who have paid huge prices for their homes and hence can probably afford to be in a slightly higher band.

I am not going to let my heart bleed for those pensioners (or non-pensioners) who live in houses worth huge amounts, which are often too large for their needs, and who claim they can't afford the council tax. This is simply rubbish - if they are really that impecunious, they can draw down equity from their property using an equity release mortgage or similar, if they really don't want to move house.

sabelu

I was originally the owner of a 4 bed double garage band E I have converted to a five bed single garage + conservatory? Will that be likely to increase my revaluation ?

waterbaby

I'm no estate agent at all but it sounds like you have added value to your property. If the work you have done on it has led to the value increasing relative to other houses (and that is the key point; relative to other houses), then you might be in a higher band.

It depends how much you have increased the relative value by. If its not that much then you might be placed closer to the top of a band that you would have been in anyway if you hadn't done the work. If you are unlucky and the original value was at the top of a new band, you might now get pushed onto the next one.

I guess the more value you have added, the more likely you are to pay extra as a result of the work on your house.

But until we know what the new bands will be, who can tell. And presumably we won't know that until they know the distribution of house prices across the country, ie carry out the revaluation, because that's the basis they'll work it out under.