FOOL'S EYE VIEW
Save Money On Your Council Tax

By Maynard Paton (TMFMayn)
October 10, 2001

Carburton Street, London -- The Council Tax is a cost just about every homeowner has to pay. But in certain circumstances, the charge can be reduced. After moving house a few years ago, I successfully appealed against the Council Tax levy on my new home.

To recap, the Council Tax was introduced in 1993. Based upon estimated market values as at 1st April 1991, every property in the country was placed in a valuation band ranging from A to H. Essentially, the greater the value of your property, the more you have to pay to your local authority.

Discounts

Of course, there are specific Council Tax reductions available. For instance, single adult households can claim a 25% discount. Alternatively, discounts can be claimed by households with two or more adults if all but one of the residents are, for example, full-time adult students or receiving or providing long-term care. What's more, those on low incomes can also get help through the Council Tax Benefit scheme. (Your local council will have more details on all these discounts).

There's also scope for saving money by proposing to your local Valuation Office that your property be given a lower Council Tax rating. But the opportunities here are somewhat limited.

For starters, you cannot claim any reduction in Council Tax due to general house price movements since April 1991. The regulations state that only properties that have undergone substantial alterations resulting in a material increase or decrease in their value should be considered for new ratings.

Importantly, if you've demolished part of your house for example, you can claim a lower Council Tax band with immediate effect. However, if you've made substantial additions to your property, any higher banding will not come into effect until the property is sold on. In this situation, it's the new owner who eventually gets lumbered with the extra Council tax charge!

But it's on this point that most re-banding proposals occur. You move house, to one that's just been built or has had some substantial alterations done to it in the past, and you're the first to receive the new Council Tax rating. In either circumstance, you have six months to appeal against the new banding decision.

Appeal

I made my Council Tax appeal when I moved into a new property in 1998. The property was initially deemed to be in band D, effectively valuing the house at between £68,001 and £88,000 on 1st April 1991. Of course, as the property didn't exist back in 1991, some valuation subjectivity from the Valuation Office had been applied.

But given that I paid £71,500 for the house in 1998, and accounting for seven years of house price inflation too, I'd have thought the property would have been worth less than the £68,001 had it been up for sale in 1991. In other words, my new house should have been placed in the cheaper band C.

(Incidentally, with the next overhaul of Council Tax bandings due only in 2007, I'm sure the subjectivity needed for new houses is going to cause more problems in the future.)

Anyway, alongside my two neighbours, who'd just bought similar houses to mine, our appeal went to an independent tribunal. And we won! I think it's worth recounting that experience for those people who may attempt something similar. 

Evidence

Certainly the first point I'd make when attending any tribunal would be to document your "evidence". While there was a clerk busy making notes during my (somewhat informal) hearing, I'd recommend giving every member of the tribunal a printed copy of your argument to ensure each gets the full picture. It's interesting to note that the letter explaining the tribunal's eventual decision referred to my written evidence far more than either of my neighbours' cases, both of whom only presented their cases orally.

In terms of the evidence I supplied, there were two key issues. Firstly, according to the Nationwide Building Society, house prices in my part of the country (the South East of England) had averaged around 15% annual growth between 1991 and 1998. That was well above the rate implied by the original D band.

And secondly, the evidence provided by the Valuation Office was, in my opinion, inconclusive. In my case, this evidence (which is provided to appellants before the hearing) highlighted four "similar" houses that were all sold around April 1991. However, I emphasised that none of the four houses were located within the vicinity of my property (two were actually in a far more desirable location -- next door to the local railway station) and none had a garage either (unlike my house).

While not exactly leading to instant retirement, the savings from the tribunal's favourable verdict are notable. On the new band C, my annual Council Tax bill is now £668. Had we lost the appeal, I'd now be paying £751 a year. Over the years to come, with Council Tax bills always on the up, my successful appeal should generate a decent saving!

More: Valuation Office web site |  Department for Trade, Local Government and the Regions: Council Tax | Department for Social Security: Council Tax Benefit | Index of all local government web sites | Nationwide Building Society | Living Below Your Means discussion board