Azara Blog: Council tax revaluations

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Date published: 2005/06/17

The BBC says:

People who make substantial home improvements - such as loft conversions - may face higher council tax bills, it has been confirmed.

The government's Valuation Office (VOA) has confirmed that improvements could push property into a higher council tax band during council tax revaluation.

All homes in England are currently being revalued, before new council tax bands are introduced in 2007.

Previously, improvements only affected tax bands when the property was sold.

"Home improvements have always ultimately affected the value of a property for council tax purposes when it has been sold," a VAO spokesman told BBC News.

"All that is happening now is that during the revaluation process we shall be catching up with how improvements have increased a property's value.

"We are doing this so that we can fairly gauge the value of the property."
...
But the Conservatives said the plan was another example of a government stealth tax.

Shadow Secretary for local government, Caroline Spelman said moving up a council tax band would mean an increase of £270 a year for the average household.

She said: "Hard-working families and pensioners who have spent time and money on renovating their home will be hardest hit.

"Armies of clipboard inspectors will be descending on every town in England to inspect people's homes to justify whacking up their council tax bills."

Liberal Democrat Local Government Spokesman Sarah Teather said: "It's absurd for the government to be penalising people for investing in their homes.

"Council tax revaluation will just prove how unfair it is to base local taxes on the value of someone's home."

This is a no-brainer, the Tories and Lib Dems are just taking the piss. The council tax is a (crude) property tax and so it is proportional to the value of your property. If your house has increased in value (relatively) much more than others then your tax should go up (well, the council tax occurs in bands, so this is only an approximate rule). With the Tory / Lib Dem logic, if you buy a plot of land with a near worthless derelict bungalow on it and get planning permission to replace it with a 10 million pound house, then you should still pay the original council tax (after all, it is just a "home improvement").

House prices have mushroomed since the original council tax valuation fifteen years ago, and the only real question now is whether the government is going to use that increase to sneak in a "stealth" increase in the council tax. If the revaluation is fair then the average property in an area should have the same bill before and after. Unfortunately life is not fair and New Labour, the champion of stealth taxes, is running the country. And unfortunately the Tories and Lib Dems seem to have decided not to raise this real issue, instead just posturing.

And there is nothing wrong per se with a property tax, which is a crude wealth tax. Like all other taxes it is arbitrary and the rate is arbitrary. The Lib Dems pretend that income taxes are fairer than property taxes but that is just nonsense. As everyone knows, the only tax that is fair is one that someone else has to pay.

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