How your home is banded
In this section, we explain how properties are valued for council Tax. You can find information about the bands for England and Wales, the basis of valuation and the assumptions that we must make when valuing your property.
- Council Tax Bands
- The starting point
- Size, layout, character and locality
- State of reasonable repair
- Dwellings used for business
- Stables - Council Tax Or Non-Domestic Rates?
This information should not be regarded as a complete guide to the law.
Every home has to be placed in one of the bands below for council tax purposes.
The bands for England and Wales are as follows:
- Band A - up to 40,000
- Band B - 40,001 to 52,000
- Band C - 52,001 to 68,000
- Band D - 68,001 to 88,000
- Band E - 88,001 to 120,000
- Band F - 120,001 to 160,000
- Band G - 160,001 to 320,000
- Band H - 320,001 and above
Old bands pre 1 April 2005 Current Bands with effect from 1 April 2005
- Band A - up to 30,000
- Band B - 30,001 to 39,000
- Band C - 39,001 to 51,000
- Band D - 51,001 to 66,000
- Band E - 66,001 to 90,000
- Band F - 90,001 to 120,000
- Band G - 120,001 to 240,000
- Band H - 240,001 and above
Current Bands with effect from 1 April 2005
- Band A - up to 44,000
- Band B - 44,001 up to 65,000
- Band C - 65,001 up to 91,000
- Band D - 91,001 up to 123,000
- Band E - 123,001 up to 162,000
- Band F - 162,001 up to 223,000
- Band G - 223,001 up to 324,000
- Band H - 324,001 up to 424,000
- Band I - 424,001 and above
The basis of valuation for a dwelling which is not used for any business purpose is the amount which, subject to certain assumptions, it would have sold for, on the 'open market' by a 'willing vendor' on 1 April 1991 in England and 1 April 2003 in Wales.
- 'open market' means a market where the property is offered openly with adequate publicity being given to the sale. Please note that if your property was purchased under a discount scheme (such as 'Right to Buy') this does not fall within the definition of 'open market' and therefore will not apply.
- 'willing vendor' means someone who sells the property as a free agent and not someone who is forced to do so.
Why 1 April 1991 in England?
Council Tax came into effect on 1 April 1993. However, the process of valuing every domestic property in England and Wales for banding purposes started some time before this. Therefore, we had to adopt a valuation date prior to 1 April 1993 so that all properties would be valued on a common footing. Even if your property was built after 1 April 1993, we must band the property according to what we think that its value would have been on 1 April 1991. This means that recent sale prices are not necessarily a good guide to the correct band for a property.
In Wales properties were revalued by reference to values at 1 April 2003, as these came into effect on 1 April 2005.
Because we must ensure a common approach to valuing all domestic properties for council tax, we must make a number of standard assumptions about your property.
The main assumptions that we must make when deciding the price a dwelling would have sold for on 1 April 1991 in England, 1 April 2003 in Wales, are as follows:
- that the sale was with vacant possession;
- that the interest sold was freehold except for flats when a lease for 99 years at a nominal rent has to be assumed (The actual lease term is ignored);
- that the dwelling had no potential for any building work or other development requiring planning permission;
- that the size, layout, and character of the dwelling as well as its locality must be considered as they actually existed at 1 April 1993 (2003 in Wales) or, depending on the circumstances, a later date;
- that the dwelling (and any common parts such as an entrance or hallway shared with other dwellings) was in a 'state of reasonable repair'.
It is important to emphasise that we must, by law, make these 'assumptions' in order to ensure a common approach to valuing properties for council tax.
For example, two identical flats within a purpose built block may have different lease terms. Whilst one flat may have 15 years remaining on its lease, another may have 40 years remaining. An identical flat in a nearby block may have an unexpired lease term of 110 years. However, for council tax purposes, all the flats will be valued as though they are held on a 99 year lease.
This approach ensures that similar properties within the same area are not placed in various different council tax bands.
Likewise, if the sale price of a property sold with a 'sitting tenant' is less than that of its identical neighbours, it does not mean that the property should be placed in a lower council tax band. This is because we must assume that the sale was with 'vacant possession'.
When valuing a property for council tax purposes we must consider the physical state of the property and its locality at a specific date on or after 1 April 1993 and then consider what its value would have been on 1 April 1991. This is the common valuation date for all council tax valuations in England. In Wales the relevant dates are 1 April 2005 when considering the physical state of the locality and 1 April 2003 when considering the value.
The following are examples, in England, of when we must consider the question of which date we should adopt to reflect the size, layout, character and locality of the dwelling:
a) A council taxpayer makes an appeal on 3 June 1999 claiming that a dwelling's banding is too high. On the basis of the appeal, we will value the dwelling having regard to all its physical factors as they existed at 1 April 93 (when the Valuation List came into force).
b) A landlord completes work to convert two flats into one on 3 May 2000. We will value the 'new' dwelling having regard to all physical factors as they existed at 3 May 2000 (the date of the merger).
c) A house owner substantially improves her home and then sells it on 6 June 2000. We will re-value the house having regard to all physical factors as they existed at 6 June 2000 (the date of sale).
The band of a dwelling which has had improvements which increase its value since 01 April 1993, cannot be rebanded until it's sold. If you are considering buying a property which has been extended since 1993, you should be aware that the Council Tax band can be increased after the sale has taken place.
On occasion, information is brought to our attention that indicates a property has been incorrectly banded. We must correct these errors. This means either a reduction or an increase to the band. Band increases will only be effective from the date of alteration of the Valuation List, not from 01 April 1993. Band reductions will be effective from the date the property entered the Valuation List.
d) A taxpayer stops using the ground floor of his home as a hairdressing salon on 9 September 2000. We will re-value the whole property having regard to all the physical factors as they existed on 9 September 2000 (the date when the change in use occurred).
e) A taxpayer demolishes her garage on 1 December 2000 and has no intention of rebuilding it. We will re-value the dwelling having regard to all the physical factors as they existed at 1 December 2000 (the date of demolition). Please note that if a demolition is linked to future works such as demolishing a garage prior to building an extension then the existing band cannot be altered.
f) A taxpayer finishes installing a chairlift and adapting the bathroom for use by his disabled mother on 9 February 2000. We will re-value the house having regard to all the physical factors as they existed as at 9 February 2000 (the date the adaptation occurred).
g) A new sewerage treatment plant opens close to a house on 25 February 2000. The banding of the dwelling has not been altered since council tax came into force although the previous owner made improvements and sold the house on 14 January 2000 (The banding was not altered because the improvements made were limited).
We will revalue the dwelling having regard to its size, layout and character as they existed at 14 January 2000 and the state of the locality which existed at 25 February 2000 (the date of change to the locality).
We must assume that any dwelling that we are valuing for council tax is in a 'state of reasonable repair'. This does not mean that we will assume that all properties are in 'good' state of repair. Instead, we must decide what state it would be reasonable to expect for a dwelling having regard to its age, character and locality.
Whilst we must consider all of these three factors, the word 'character' is particularly important.
For example, one house in a terrace of ten otherwise identical properties has not been maintained but allowed to deteriorate. However, its basic character is likely to remain the same as that of its neighbours. In such instances, we must assume a 'state of reasonable repair' which is the same as actually exists for most of the nearby properties. Therefore, the property's disrepair is not reflected in its banding.
Modernisation and improvements are not 'repairs'. Therefore, when considering the 'state of reasonable repair' of a property, we will not assume that a house has been modernised when in fact it has not. In such instances, we will assume a reasonable state of repair, but will value the property having regard to its lack of modernisation.
Very occasionally a dwelling, whilst being of the same age and design as other property in the neighbourhood, may be wholly different in character (for example: due to a specific structural defect). Here the state of repair that we assume is not that of the majority of its neighbours but other dwellings which have similar defects. In such instances we will reflect the structural defect in the value of the property and we may band it differently to neighbouring properties which have no such defect.
Property used for both domestic and business purposes include, for example, working at or from home, public houses, shops with living accommodation or farms. There is a separate basis of valuation for such dwellings which are described as 'composite'.
The valuation is subject to the same assumptions that apply to other dwellings. It also takes account of the business part and is required to reflect that portion of the value of the whole property which can reasonably be attributed to domestic use.
For identification purposes, any dwelling that is 'composite' is shown in the Council Tax Valuation List with the abbreviation 'comp' next to its entry.
You may be liable to pay business rates on your stables even if you do not use them for commercial purposes.
The term business rates actually refers to non-domestic rates, which is a form of property tax payable on all property that is not classed as domestic. Domestic property is liable to council tax. Stables will be classed as non-domestic, and liable to non-domestic rates, unless:
- They are used to stable horses that are worked on agricultural land for an agricultural purpose. Horses used for leisure purposes - commercially or otherwise - do not fall into this category. Hence their stables do not qualify as agricultural buildings, no matter where they are situated be it on a farm or not. Further details on the exemption of agricultural premises can be found under Schedule 5 to the Local Government Finance Act 1988.
- They are considered to be domestic and come within the council tax band of the living accommodation. Stables are only likely to be included within the council tax band if they are sited within the domestic curtilage of that property and used for private purposes on a domestic scale appropriate to the house. In this respect, the domestic curtilage is usually considered to be the same as the garden area surrounding the house. Further details on this definition of domestic property can be found in section 66(1) of the Local Government Finance Act 1988.
This is a complex area and we consider each case on its own facts. For further information, you should contact your local valuation office.