Council Tax Rises Above Inflation – Is there an alternative?

Tom99

[FONT=Verdana, sans-serif]One of the ways Councils could raise more from tax, other than a general increase, is to remove the concession which delays re-banding of extended properties until they are next sold.

[/FONT] [FONT=Verdana, sans-serif]I don't know why this concession was introduced, but it seems unfair that one household in a large property can pay £100's pa less than their neighbour in a similar or even smaller property, just because they extended 5, 10 or even 20 years ago.

[/FONT] [FONT=Verdana, sans-serif]The admin cost of making this change would be quite small since the VO already have most of the details they require and in many cases will have already updated the attributes they hold against the property to reflect the extension.

[/FONT] [FONT=Verdana, sans-serif]The prevision 2005 revaluation in England was cancelled and any future revaluation is on the back burner because of negative voter reaction rather than any tax logic. However the only losers from this change would be those who were still in their extended property and any complaint of unfairness does not stand up to scrutiny.

[/FONT] [FONT=Verdana, sans-serif]The are 18 properties in my postcode and 5 have an improvement indicator, that's 28% which need looking at. Say only 10% are re-banded upwards, with over 22m properties subject the council tax that's 2m which might increase. [/FONT]

lincroft1710

The Local Government Finance Act 1992 specifically exempted dwellings from having their CT band increased on account of alterations or extensions carried out by the current owner. It is believed that the reasoning behind this was not to deter property owners from making improvements to their homes.

It would therefore require a further Act of Parliament or a Statutory Instrument to amend this. However it is doubtful if the current government would have time to consider this.

The VOA didn't used to inspect such dwellings until there had been a change of owner (procedures may have changed) so it could well be a major task plus there would be extra appeal work to deal with.

Tom99

[FONT=Verdana, sans-serif]Yes a bit of legislation might be required to introduce this change but I doubt that when the concession was introduced from 1991 it was envisaged it would be everlasting, 27 to date and growing.

[/FONT] [FONT=Verdana, sans-serif]Regarding the VO workload, they already have access to planning permission drawings to calculate the increase size, which account for most of the increase in value, and the VO did not intend to inspect these extended properties as part of the cancelled 2005 revaluation.

[/FONT] [FONT=Verdana, sans-serif]If you assume current average council tax is £1,200 pa for the 24m dwellings involved and 10% of these are subject to a band increase averaging £150 pa, that would raise an extra £360m pa the equivalent of a general 1.25% rise.[/FONT]

lincroft1710

VOA have no right of access to pp drawings, other than that which in online in the public domain. From many years personal experience, extensions aren't always built to plan and many extensions don't require pp. Unless things have changed since I retired from the VOA, all extensions were inspected where possible.

"A bit of legislation" requires many, many hours of work even before it would go before parliament. So your first step would be to write to your MP suggesting this amendment. I have to say I believe this may have been mooted by the government or its advisers some years ago.

I think your figures are based on too small a sample to be convincing. There are many many properties which will not be the subject of an improvement, e.g. the vast majority of flats or apartments, mews or courtyard houses.

But write to your MP, see what they say.

Tom99

[FONT=Verdana, sans-serif]I agree it would not be easy and my figures are a bit flaky, but I am sure a substantial figure could be raised. I have, as you suggested, written to my MP.[/FONT]

CIS

The government likely won't budge because it opens the door to a full scale re-banding, which they are trying to avoid as it's political suicide.

They'd much rather stick to cutting central grants and then throwing the the right to set a discount or exemption locally, with the 'expectation' that it won't be used to recoup the losses. That way the government can pass the blame.

Tom99

CIS wrote: »

The government likely won't budge because it opens the door to a full scale re-banding, which they are trying to avoid as it's political suicide.

They'd much rather stick to cutting central grants and then throwing the the right to set a discount or exemption locally, with the 'expectation' that it won't be used to recoup the losses. That way the government can pass the blame.

[FONT=Verdana, sans-serif]Yes you are right and just as a follow up, the letter to my MP produced a reply from the Minister for Local Government.

[/FONT] [FONT=Verdana, sans-serif]He said there are no plans to change the rule on extensions because it may deter people from improving their homes.

[/FONT] [FONT=Verdana, sans-serif]He also gave the reasons why there were no plans to revalue even though that was not something I was arguing for as:

[/FONT] “[FONT=Verdana, sans-serif]The Government is committed to keeping council tax low and has no plans for a revaluation. Revaluation would be expensive to undertake and could result in increases in bills for many households”

[/FONT] [FONT=Verdana, sans-serif]This gives three reasons for no revaluation none of which I think are valid

[/FONT] [FONT=Verdana, sans-serif]'Keep CT Low' – A revaluation is tax neutral the same amount of tax is raise before and after the revaluation.

[/FONT] [FONT=Verdana, sans-serif]'Expensive' – Yes there will be a cost but a property tax based on values 27 year out of date does not make sense. The VO have their automated valuation model which will do most of the work and nobody complains about commercial property being revalued every 5 years or so, which probably requires more expensive professional staff than CT.

[/FONT] [FONT=Verdana, sans-serif]'Increased bills for many' – Yes of course it will, but there will be an equal number of bills that go down, its about fairness
.[/FONT]
[FONT=Verdana, sans-serif]The real reason why there will be no revaluation is as you say, political suicide, those who [/FONT][FONT=Verdana, sans-serif]think[/FONT][FONT=Verdana, sans-serif] their CT might go up will always shout louder and the Daily Mail will headline about Council Tax snoopers invading your property.[/FONT]

molerat

In my postcode there are 6 out of around 100 and one is a disability needs so your figures are too small a sample. I suspect by far the majority are vacant properties.

Tom99

molerat wrote: »

In my postcode there are 6 out of around 100 and one is a disability needs so your figures are too small a sample. I suspect by far the majority are vacant properties.

[FONT=Verdana, sans-serif]Your right my sample is far to small, but the VO did recently publish the stats:

[/FONT] [FONT=Verdana, sans-serif]There are 1,646,632 dwellings in England and Wales with an improvement marker and on average 20% of properties with an improvement marker result in a band increase when reviewed.

[/FONT] [FONT=Verdana, sans-serif]That mean about 330,000 households are paying less council tax than the value their property ought to attract.[/FONT]

ChuckMountain

Tom99 wrote: »

[FONT=Verdana, sans-serif]Your right my sample is far to small, but the VO did recently publish the stats:

[/FONT] [FONT=Verdana, sans-serif]There are 1,646,632 dwellings in England and Wales with an improvement marker and on average 20% of properties with an improvement marker result in a band increase when reviewed.

[/FONT] [FONT=Verdana, sans-serif]That mean about 330,000 households are paying less council tax than the value their property ought to attract.[/FONT]

Yes understand where you are coming from, it is always going to be quite controversial and therefore something to be avoided in times of political instability. Whether you agree with a tax based on a value of your property is also a political consideration.

They don't want to discourage people from altering homes, if like round here at significant proportion of house extension do not necessarily increase number of people living there. Then I can see the benefits of not increasing the prices as they are not using any more services than before.

Is it fair that the new owners get stung, probably not either but the system is always to be inflexible if its based on value or say number of people living there.

lincroft1710

Tom99 wrote: »

[FONT=Verdana, sans-serif]Your right my sample is far to small, but the VO did recently publish the stats:

[/FONT] [FONT=Verdana, sans-serif]There are 1,646,632 dwellings in England and Wales with an improvement marker and on average 20% of properties with an improvement marker result in a band increase when reviewed.

[/FONT] [FONT=Verdana, sans-serif]That mean about 330,000 households are paying less council tax than the value their property ought to attract.[/FONT]

There are approximately 25,500,000 dwellings in England and Wales, so 330,000 is less than 1.3%, probably why the government do not want to alter the status quo.