Under the current system of valuation bands, council tax for homes in England is based on the value the property would have achieved in 1991, rather than today.
However, should proposals laid out by the government go ahead, home improvements such as double glazing, fitting a new bathroom or building a garden shed could mean residents are pushed further up the banding system. It is estimated that those who make home improvements could see their council tax bill rise by more than £250 a year.
Improvements made to homes will be traced through planning applications. In addition, the government will introduce officials with power to inspect homes if they suspect improvements may have been made. Councils will also send out questionnaires so minor improvements can be detected. The worst to be hit from the newly proposed stealth tax would mainly be pensioners and tenants of rented property.
Martin Wade, director at Mortgage Options, commented: “Although it does make sense to re-value property, with current values from 1991 needing updating, it is clear this is another stealth tax. The government currently collects over £1 billion a day in tax. This is yet another exercise to increase the tax burden on individuals aimed at combating the government’s increasing deficit. However, I don’t think this will affect the housing market, with demand remaining elastic even if these changes occur.”
