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Council Tax

Council Tax is a local tax levied by councils on residents to pay for such things as education, police, roads, waste disposal, libraries and community services. The tax includes payments for the local borough council; the local police, fire and civil defence authorities; and possibly a ‘special expenses’ payment in certain areas. Each council sets its own tax rate, based on the number of residents and how much money they need to finance their services, and it varies considerably from borough to borough. Affluent boroughs don’t necessarily charge higher taxes than relatively poor boroughs, in fact the opposite is often the case, although boroughs with low Council Tax rates may provide fewer services.

Generally you can expect to pay between £2,000 and £2,750 per year for a property worth over £320,000 (except in Wandsworth and Westminster, where it’s around £1,250 only) and £400 or so less for a property valued between £160,000 and £320,000.
The amount payable depends on the value of your home, as rated by your local council (not necessarily the market value). Properties in England are divided into the following eight bands:

Band Property Value (£)

A - - - Up to 40,000

B - - - 40,001 – 52,000

C - - - 52,001 – 68,000

D - - - 68,001 – 88,000

E - - - 88,001 – 120,000

F - - - 120,001 – 160,000

G - - - 160,001 – 320,000

H - - - Over 320,000

The government hasn’t changed the bands since the introduction of Council Tax in 1993, so the vast majority of London properties now fall into the top two bands. In recent years, Council Tax has increased at well above the rate of inflation and a much delayed review of property values is currently planned for 2007, which is expected to result in a further sharp increase in tax rates. Council tax bills in most areas have doubled in less than ten years, despite the fact that councils that increase their tax rate above a government-fixed threshold (5 per cent in 2006) risk having their spending capped.
Council tax can usually be paid by direct debit from a bank or building society account, by post with a personal cheque, in person at council offices, by credit card, or at a bank or post office. Payment can be made in a lump sum (for which a reduction may be offered) or in ten instalments from April to January.

The full Council Tax assumes that two adults are living permanently in a dwelling. If only one adult lives in a dwelling (as their main home), the bill is reduced by 25 per cent. If a dwelling isn’t a main home, e.g. it’s unoccupied or is a second home, there’s usually a discount (e.g. 10 to 25 per cent) depending on your local borough council. Exempt dwellings include those that are unfurnished (usually exempt for up to six months) or undergoing structural alteration or major repair (usually exempt for up to six months after completion), and those that are left empty for specific reasons (e.g. the occupier is in hospital, a nursing home or prison, or is a student) or are occupied only by people under 18 years of age. Always confirm a discount or exemption with your local borough council.

Certain people aren’t counted when calculating the number of adults resident in a dwelling, e.g. full-time students and 18 and 19-year-olds who have just left school. If you or someone who lives with you has special needs arising from a disability, you may be entitled to a reduction in your Council Tax bill. Those receiving Income Support usually pay no Council Tax and others on low incomes have their bills reduced. You can appeal against the assessed value of your property and any errors due to exemption, benefits or discounts.

Anyone who’s liable for Council Tax must register with his local council when he takes up residence in a new area, and is liable to pay Council Tax from his first day of residence. A register is maintained by councils, containing the names and addresses of all people registered for Council Tax, and is open to public examination. If you don’t want your name and address to appear on the register, e.g. for fear of physical violence, you can apply for anonymous registration. New arrivals must register with their local council after taking up residence or after moving house. When moving to a new borough you may be entitled to a refund of a portion of the Council Tax paid to your previous council.

You can find out the Council Tax rate for any property from the Valuation Office Agency’s website (www.voa.gov.uk).

Copyright © Survival Books Limited 2006

“Buying or Renting a Home in London” 1st Edition, David Hampshire and Sue Harris.
Reproduced with the permission of Survival Books Limited.

Further information on this topic can be found in “Buying or Renting a Home in London” 1st edition, by David Hampshire and Sue Harris.

For extensive, annually updated information about buying or renting a property in London, you can purchase this book at www.survivalbooks.net

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