Rising bills fear over council tax plan
HOUSEHOLDERS could be facing big increases in their council tax bills if the Government goes ahead with plans to revamp the banding system.The proposals have led to fears that people on limited incomes may be unable to pay the expected hikes.
HOUSEHOLDERS could be facing big increases in their council tax bills if the Government goes ahead with plans to revamp the banding system.
The proposals have led to fears that people on limited incomes may be unable to pay the expected hikes.
Under current guidelines the level of council tax a householder pays is based on how much their property was worth if sold in 1991.
But the Government is looking at re-banding all properties from April 1, 2007, based on the price a home would fetch if it was sold on April 1 this year.
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While the Office of the Deputy Prime Minister said increases in the price of a property would not automatically mean it would rise up a band, a spokesperson confirmed it would depend on how the value compared to the average market price.
According to the Halifax Price Index between 1991 and 2004, house prices in every town monitored in Suffolk and north Essex recorded average rises well above national figures.
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Council tax bands range from A, which has the lowest bills, to H, with the average property in Band D costing between £68,001 to £88,000 in England, according to the Valuation Office Agency.
Lord Hanningfield, leader of Essex County Council, said: “Without a doubt people in Essex and Suffolk will be re-banded higher. Our values have gone up more than other parts of the country in the last 10 years or so since the last revaluation. There will be a big hike.”
He added: “It is a very unpopular thing when it happens. People can find they go up two bands or so and rather than have a 2% rise they have a 20% increase.”
Reg Hartles, chairman of Protest Against Council Tax Suffolk (PACTS), said: “We don't understand why the arbitrary increase in property value over the years between 1991 and 2005 necessitates the possible increases in council tax.
“The increase in your home value will have no effect on your demands on county council services, such as education, social services and policing, so why should we be in fear of another tax hike?”
Lowestoft resident Jack Thain, chairman of Suffolk Pensioners' Association, said: “Any increase will hurt the pensioners and they will come back with a massive swipe at it.
“I don't think this will solve the problem of council tax as this Government has unburdened all its requirements on to local government.”
David Rowe, deputy leader of Suffolk County Council and portfolio holder for strategy and finance, reassured that a hike in council tax would not necessarily follow a revaluation.
“What I think will probably happen is that there will be an extension at the higher end so that we see tax bands of maybe £250,000, £500,000 or £1m introduced,” he said.
“The number of properties in this bracket in Suffolk is pretty small and the amount of people that it would therefore affect would be a minority. Most people will be in the lower tax bands of A, B or C which I don't think will change very much.”
A spokesperson for the Office of the Deputy Prime Minister said that although they could not speculate on how the individual bands would be set they could reassure people that the Government was not expecting council tax to rise.
“The revaluation is not about increasing the amount of money raised overall from council tax. Any speculation that this will lead to huge rises is an untruth,” she said.
“Just because the price of a property has increased does not mean it will automatically go up a band. It depends how it has increased compared to the average market price. There is no fixed point. Changes will be relative to the average cost of a property in 2005.”
A final announcement on the new bands is due to be made at the end of this year.