COUNCIL TAX BAND NEW BUILD

jonnym8083

Not sure if right place to post. As we are currently in the process I’m using this forum a lot for great advise as first time buyers.
anyways in regards to council tax we are buying a new build list price was 310k and showing as band E. we however had the property valued lower and builder has now accepted at valuation price of 280k. Using a price index paying 280k today would make property worth less back in 1991 with how they calculate council tax making it fall into band D instead of band E.
would this be worked out from what we paid or would we have to challenge it?
we haven’t been sent a bill yet as not yet completed but from the start the builder advised it was band E? Is that set in stone or based on their list price? 

Thanks for reading this post and any advice great fully received.
thanks again 

TripleH

The banding is not set in stone, also  the builder does not detetmine the banding of the property, only the government does (sorry cannot remember the exact department). I would wait until you move in as you cannot challenge the banding until the property is officially assessed.
Keep the information you have collected, and if you find any more, great. You can use that to support your claim. Don't know the exact process myself having never done it, but there is a guide on this website.

AdrianC

jonnym8083 said:

anyways in regards to council tax we are buying a new build list price was 310k and showing as band E. we however had the property valued lower and builder has now accepted at valuation price of 280k. Using a price index paying 280k today would make property worth less back in 1991 with how they calculate council tax making it fall into band D instead of band E.

No, it's not that simple. The market has changed drastically in the last month or so - and that change doesn't necessarily back-calculate to the nominal 1991 values. The calculation is based on location/size/type of property. It certainly isn't done simply by saying "Multiply price paid by X%".

CT banding is based on assessments by the Valuation Office Agency - https://www.gov.uk/government/organisations/valuation-office-agency

jonnym8083

This valuation was done in January way before lock down etc.. 
I will see what they come up with when we move in.
thanks both 

jonnym8083

Yes we are using HTB so we couldn’t proceed unless they sold us the house at lenders valuation. 280k is sale price. Completion was due July however site shut so may go into August.

CIS

Mickey666 said:

When is the official banding carried out?  When the house is built, when it is first sold (deposit or stage payments for a new build?) or when it is first occupied?  I'd guess when it is first occupied because before then there is no one liable for the CT bill (unless the builder of an unsold house is liable when it is finished or finally signed-off by building control?).   The OP says the builder has accepted a 'valuation' of £280k - is that the actual price being paid for the property and when is the expected completion date?  Surely the date the house is first sold and registered is the date when the banding will be assessed by the VOA, at which point any previous estimates of its value are irrelevant.

The banding will take place as soon as the Valuation Office Agency can get around to getting it done however his council tax liability will be backdated to the date he purchased the property.

Assuming the property was ready to be banded before he purchased it, then a banding would be applied for then and, when the sale took ahead, the Valuation Office Agency would then look again at the banding - there should be no change between the two however (unless something really unusual happened).

RelievedSheff

Have a look at what other completed and lived in houses of the the same house type are banded at on the website below:

https://www.gov.uk/council-tax-bands

That is what your property will be banded at. The purchase price makes no difference. The council tax band is based on property type, size, location, etc. rather than price paid.

AdrianC

Mickey666 said:

RelievedSheff said:

Have a look at what other completed and lived in houses of the the same house type are banded at on the website below:

https://www.gov.uk/council-tax-bands

That is what your property will be banded at. The purchase price makes no difference. The council tax band is based on property type, size, location, etc. rather than price paid.

I'm not convinced that's entirely true.  The price paid will make a significant differece, though perhaps less so if it's on a estate of near-identical houses.  I know someone who moved from an 4-bed detached house to an 8-bed detached house in quite a few acres that was one CT band LESS than the 4-bed.  It was also less than half the price, so clearly price played a big part in the banding valuation.

The banding is entirely on valuation - well, nominal 1991 valuation.
The OP's question is one of how relevant a short-term market adjustment is to that extrapolation.

A generic 3bed semi with a garage of a certain floor area in a particular part of town will be straightforward to extrapolate - because there will be plenty of 1991 comparables.

RelievedSheff

Mickey666 said:

RelievedSheff said:

Have a look at what other completed and lived in houses of the the same house type are banded at on the website below:

https://www.gov.uk/council-tax-bands

That is what your property will be banded at. The purchase price makes no difference. The council tax band is based on property type, size, location, etc. rather than price paid.

I'm not convinced that's entirely true.  The price paid will make a significant differece, though perhaps less so if it's on a estate of near-identical houses.  I know someone who moved from an 4-bed detached house to an 8-bed detached house in quite a few acres that was one CT band LESS than the 4-bed.  It was also less than half the price, so clearly price played a big part in the banding valuation.

The OP is talking about a new build property on a new build estate.

All of the properties of a certain type will be the same council tax banding!!

We bought a new build last year. We paid £210k for ours. The exact same house type on the end of our street sold for £235k, another on the next street sold for £205k. They are all Band C for council tax purposes.

RelievedSheff

Mickey666 said:

Yes, that's what I said - if the houses are all more or less on an identical estate.  But where that's not the case, the price will be the main determining factor.  How else could an 8-bed house in extensive grounds be banded below a 4-bed house?

As for your example, with only a £30k spread of prices, no wonder they're all in the same CT band.

Personally I dislike property-based council tax because it is not based on the ability to pay and would much prefer some sort of local authority income-based tax, but I guess that's another topic altogether.

Our old house was a 2 bed and Band A. Properties across the road were 4 bed and Band A. 

The OP is also talking about a £30k price difference so unlikely to change the council tax band!

lincroft1710

Mickey666 said:

Personally I dislike property-based council tax because it is not based on the ability to pay and would much prefer some sort of local authority income-based tax, but I guess that's another topic altogether.

Property based taxes for funding local government have been around for literally centuries. The only time a non property based method was used relatively recently was in 1990 with the introduction of the Community Charge which lasted all of 3 years.

Successive governments have said they prefer a property based tax but tend not to shout it from the rooftops.

There are certain reliefs available for those on low income