Unexpected changes to council tax bandings

MP John Lamont.
MP John Lamont.

House buyers are being warned that they may find themselves hit with higher council tax bills because of changes made to the property by the previous owner.

Borders MP John Lamont is highlighting the problem after being contacted by a constituent who found themselves in that situation.

Council Tax bands reflect a property’s open market value as at April 1, 1991, or for new properties when they are built. Bands only change when the property is sold following major improvements which affect its valuation or if an error with the banding valuation is discovered. There is no automatic requirement for a seller to make it clear in the Home Report that improvements may result in a council tax band rise.

Mr Lamont believes a simple fix would be for home reports to include a reference to any work which might result in a council tax revaluation. Alternatively, home owners could be required to have a council tax revaluation on completion of any major work to their property.

“The current rules surrounding council tax bands are in serious need of modernisation,” said Mr Lamont.

“The system is already outdated, with a property’s band based on its potential value as far back as 1991. Now a constituent of mine has been in touch to highlight another problem with the system. Buyers are being forced to play roulette over whether they will be hit with a council tax revaluation, which can cost them hundreds of pounds a year.

“Given that buying a home is the biggest purchase anyone makes, many can’t afford to be hit with an unexpected bill so soon after moving in.

“I’ve written to the Finance Secretary about this, but his response was that there are no plans to change the rules at this time, which I find disappointing.

“We don’t want to penalise people who improve their homes, but it does seem unreasonable that it is the next home owner who is faced with an, often unexpected, council tax rise.”