Council Tax – a ‘spring clean’??
As the Liberal Democrats slide gently backwards from their ‘Mansion Tax’ proposals, the prospect of a Council Tax revaluation, incorporating higher value tax bands (adding J and K – or even L or M – to the current H band?), looks an increasing possibility. So how do we, as property search agents in Kent and Sussex, expect this to impact on the market for higher value homes?
And its not just a LibDem move. According to a recent Times article on the subject, a British Property Federation poll even showed up to 92% of Tory MPs backing reform; with some 39% of Labour MPs want it too, even though their party obviously prefers Mansion Tax.
With the idea having such cross party support, it would just leave us guessing as to when it might be implemented. However, this is to overlook the main hurdle to such a scheme – the cost of assessing the value of every home in the country by the Valuation Office Agency. Hitherto this has been regarded as prohibitive – which is why values have remained static ever since the Council Tax system was introduced in 1993.
It is not just the cost of undertaking such a massive revaluation; the last revaluation (planned for 2007) was postponed ‘until after the next election’, as the then government perceived the effect of steep tax increases on a disgruntled electorate. Also, with a process that would take years (and be an inexact science) the door would be left open to complaints that valuations are out of date before they have been implemented – so soaking up yet more resources in fighting appeals from disgruntled home owners.
So, if the man in the street sees that his tax bill will also be rising, it looks quite possible that the politics of envy might yet be tempered