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These Instructions and Advice were prepared for internal use within the Valuation Office Agency as part of work towards a council tax revaluation in England that was due to take effect on 1 April 2007. The government announced its intention to postpone the revaluation on 20th September 2005 and preparatory work for a revaluation in 2007 has now been stopped.
The recent DTLR announcement of a council tax revaluation coming into effect in 2007 has inevitably led to a number of questions about what is known at this stage. The following notes, whilst they cannot shed any new light on the announcement, do provide some background information which may answer some of your questions.
Please note that any media enquiries should be directed to:
- For the council tax revaluation in Wales, direct press enquiries to the Welsh Assembly Government press office; telephone 029 2082 3615
- For the revaluation in England, direct press enquiries to the DTLR press office; telephone 020 7944 3044
You should also notify your GVO of any such enquiry.
1. Why has a revaluation been announced?
Council tax was introduced in 1993. In the white paper, 'Modern Local Government: In Touch with the People', the Government said that council tax is working well as a local tax. The consultation document issued in September 2000 (Modernising Local Government Finance: a Green Paper) stated that although there were no plans to change the council tax system, one issue that could be considered to improve the fairness of the tax was the introduction of a regular cycle for council tax revaluation.
2. Why is the revaluation not taking place until 2007?
There are several factors which have influenced this decision:
- The Government is reviewing the ways in which the local government finance system operates and further announcements on this will be made in a white paper expected this autumn. Any changes will be introduced during 2003-04.
- The VO will be introducing a new non domestic rating list in 2005. This is a statutory responsibility and preliminary work has already started.
- To allow time to deal with appeal work arising from the non domestic revaluation, and to make best use of resources, it was considered that the valuation work on a council tax valuation could start in 2005 and the new lists would then be published in 2007.
3. What will be the valuation date ? Assuming that there is no change to the timetable used for both council tax and non domestic rating, the valuation date will be 1 April 2005.
4. Why 2005? A council tax revaluation will involve the banding of all 21 million properties in England at a common valuation date. Valuations are initially based on a consideration of the sale prices of properties in the area. To ensure that as much information as possible is available it is necessary to look at transactions over a period of time each side of the valuation date. This is part of the reason why the valuation date is set not less than two years before the final lists are published. Other factors include:
- providing time for analysis and the actual banding process;
- giving DTLR some indications of the effects of the revaluation. DTLR will need to consider the financial consequences of the revaluation before the lists are published.
5. Will the VO do the revaluation and will the private sector be involved ?
The VO will have overall accountability for the production of the new lists. The particular point about who undertakes the work in the field has not yet been decided. However, in line with Government policy, the need to involve the private sector is a possibility that will be considered and will be discussed with DTLR as their detailed requirements emerge.
6. Will the numbers of bands/range of bands be changed? The Government has not yet made any decisions on the need to change either the number of bands or the value ranges within the bands. We expect that these decisions will not be made until closer to the valuation date (2005) when reasonable estimates of the effects of the revaluation can be made by considering the general level of property values at the time.
7. We know there are anomalies in the current lists - will we get it right next time? We accept that due to the speed at which the current lists were created in 1992/93 there are still some anomalies in bandings. The situation has been further affected by the fact that valuation significant alterations to properties are only reflected when a subsequent sale occurs. With the longer time available to prepare the new lists, the VOA is starting a review of the whole valuation procedure with the aim of reducing banding anomalies to a minimum.
8. What about rights of Appeal? In 1993 there was a period of eight months from 1 April within which any council tax payer could make an appeal if they considered their band to be incorrect. We expect that there will be a similar right of appeal from 1 April 2007. We also expect that after that time the same restricted rights of appeal as there are now (broadly related to physical changes to the property) will apply.
9. Will there be public consultation before the lists are published? The green paper included comments on the review of non domestic revaluation and made proposals to the effect that ratepayers should be more involved in the valuation processes. We are incorporating these proposals in the (rating) modernisation programme. Whilst we expect that similar principles may apply to a council tax revaluation we have not yet considered the practicalities, but will do so within our forward planning.
June 2005
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