Council concerned about house revaluations

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"Ministers should not use a property tax as a crude form of wealth tax."

The Council has launched a guide that explains how the Government's revaluation of homes throughout the country could lead to higher council tax bills for Wandsworth residents.

The Government plans to use the updated valuations to set new payment bands for council tax.

The Council states that the changes would almost certainly give all properties in Wandsworth a higher tax bill. The new valuations will be published in September 2006 and would affect council tax bills from April 2007.

At the same time ministers are also looking at wider changes to local government funding including options for new bands to cover both higher and lower value properties.

Local authorities with more properties in the higher bands and above-average price increases since 1991 are likely to lose grant

Residents would also be hit in the pocket if the council loses vital government grant as a consequence of more of its properties shifting into high bands, and because the grant loss for Wandsworth will be based on an assumed national council tax (which is twice that currently set by the council), local people will lose out even more.

Deputy council leader Maurice Heaster warned that research by the Association of London Government in 2003 had shown the loss to London councils could be as high as £400m:

"If Wandsworth's share of the shortfall was around £20m that could mean an extra £200 on each council tax bill.  Just because house prices in London are higher than the rest of the country it does not follow that residents are better off. Try telling that to a pensioner or a young family struggling with a hefty mortgage.

"Ministers should not use a property tax as a crude form of wealth tax."

The council is urging ministers to take four steps to protect London
households:

* Keep to the current number of tax bands (eight).

* Set the cut-off points for the eight bands at different
levels in each region - to reflect price variations since the 1991 valuation.

* Ensure that the amount of council tax which people in band
H pay remains no higher than twice that for Band D - one option being considered is for a multiple of five.

* Provide cash protection to ensure individual householders'
council tax increases are capped.


Properties are currently grouped into one of eight bands with A the lowest and H the highest. The higher your band the more you will pay in council tax. People in band H pay twice as much as those in Band D and three times as much as householders in Band A.

If you are keen to find out more about the Government's changes - or just want to comment about any aspect of the council tax system - visit www.wandsworth.gov.uk/revaluation

The council's views on the effects of revaluation combined with planned changes in the local government funding system will be presented to the Government's review team in October.


September 13, 2005