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When a property is improved (e.g. an extension is built), legislation prevents the VOA from increasing the existing band of that property until there is a “relevant transaction”.
The term "relevant transaction" simply means that the property has been sold as a freehold, or a lease for a period of seven years or more has been granted or transferred (i.e. sold to another party). A freehold sale also covers the situation where a leasehold owner/occupier pays a ground rent to a landlord who owns the freehold of the property, and the freehold only is subsequently sold on or bought by the leasehold owner/occupier. A 'right to buy' purchase is also a "relevant transaction" which could lead to a band increase.
Please note that transfers between spouses on divorce or an Inheritance Tax transfer of a share are not relevant transactions and do not, therefore, trigger a review of the appropriate Council Tax Banding.
If you are a potential purchaser, or a leaseholder thinking of extending the lease on a property you occupy, you should be aware that, if a property has been improved since 1993, the council tax band will be reviewed after the transaction has taken place. If a higher band is warranted, the new band will be based on what the property would have been expected to sell for on 1 April 1991. This is because all properties are allocated a band based on the price it would have fetched had it been sold on the open market on 1 April 1991. The subsequent increase in council tax will be effective from the date that the council tax valuation list, which contains the bandings of all homes
, is altered.
The only exception to this is at times of revaluation when all bands are reviewed according to the physical characteristics of the dwelling when the list comes into effect, whether or not ownership has changed.
For more information on how a property is valued and the council tax revaluation , see the council tax homepage on this website.
Information relevant in the process that may lead to an increase in banding reaches us from two main sources:
- The local authority provides the VOA with details of improvements made to property, usually from the planning and building control process.
- Sales information generally comes from the purchaser’s solicitor via the Inland Revenue Stamp Office.
It normally takes a few weeks for the sales details to reach us. On receipt, we check to see whether there is a record of any improvements to the property. If so, we will review the council tax band and, if necessary, alter the entry in the valuation list. We will notify the local authority and the occupier of any change and an amended bill will subsequently be issued.
Please note that the overall process may take some time, and that following the property's re-banding, the resulting bill from the local authority will be backdated to the date that the council tax valuation list was altered.
The electronic version of the council tax list marks all property that we know has been improved and has a band review pending following a change in ownership. However, this does not necessarily mean that the band will increase; this depends on the extent of the alterations and whether the property falls towards the top or bottom of its current band.
If you require specific advice regarding the information on this page please contact your Listing Officer who is located in your local Valuation Office.
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