Up to 400,000 homes in England and Scotland could be in the wrong council tax bands. Yet in 10 minutes, at no cost, you can check and challenge your banding, not only potentially slashing what you pay now, but getting a backdated rebate stretching as far back as 1993.
Why you may be overpaying
Many homes are in the wrong council tax bands, and have been since 1991. The story:
Once upon a time, way back in 1991, in time for the launch of its new council tax system, the Government needed every property in the land to be put in a valuation band. But time was short, and the job large, so the people in charge asked estate agents and others to help.
Yet even with all the estate agents’ help, they didn’t have time to get the detailed information together, so they set about doing it quickly by pairing up and driving down countless streets, allocating each property a band with just a glance. They became known as “second-gear valuations” as they mostly never even stopped their cars, never mind got out of them.
Many years passed, and still nobody came to rescue the poor valuations in England and Scotland, though the Welsh Government reassessed all homes there. So the flawed old valuation still dictates much of the kingdom’s banding, which is why you could be paying more than your neighbour even though you live in exactly the SAME size property.
This may sound like a fairytale, but every word is true.
How much can you expect to get?
This is no chickenfeed solution. Get your banding decreased and as well as paying £100 – £400 less each year, the repayment should be backdated to when you moved into the property, as far back as when the tax started in 1993.
Council tax reclaiming: Step by step
Follow the steps below and you could see a payout in as little as a month:
Step 1: The Neighbours Check
By far the most important step is to find out if your band’s higher than neighbours in similar or identical properties. You could simply ask them, but there’s no need as it’s public info. The band of every house in England & Scotland is available via the these websites.
In England, use the Valuation Office Agency (VOA)
In Scotland use the Scottish Assessors Association (SAA)
So first check your band, and then your neighbours’. Make sure the properties are as close as possible in size and value. Sadly, the sheer scale of the database means a few properties are missed off it. If that happens, either speak to your neighbours directly or contact the council and ask why.
If neighbours in similar properties are in a lower band than you, then you may have a claim (though it may just mean that they’re all in the wrong band).
Step 2: The Valuation Check
A second crucial step is to estimate what your house was worth in 1991, as that’s when and how the council tax bands were defined. This CAN’T be used as evidence if you challenge your band. But it enables you to check out various house prices on your street and it’s an important test that you’re on the right track if you do decide to challenge.
First – value your house
If you bought your house after 1991, you can simply use its price and date of sale to do this. If you rent or bought earlier you’ll need to find an estimated price.
It’s also worth doing this with similar neighbouring properties to check there are no anomalies.
• Go to free house price websites, enter your street name and it’ll tell you the prices of all properties sold there since 2000.
• Note down the price and date
Find the most recent sale price of a similar property to yours in your street. Now note down both the price and the date of sale.
• Now – find what it was worth in 1991
Once you have that information, you can use it to estimate what your property would’ve been worth back in 1991, and what band it’s in. You can use the calculator on the https://www.moneysavingexpert.com website.
How to work it out manually.
To do this, go to the Nationwide House Price Calculator. This is actually designed for people to put in their property price when they bought it, and work out what it’s worth now. Yet it is possible to use it in reverse to get a rough value back in 1991.
Step 3: Are you in the wrong band?
At this point, we need to throw in a serious warning. Challenging your band is not something to do speculatively without the checks, for one simple reason: You can’t ask for your band to be lowered, only for a ‘reassessment’, which means your band could be moved up as well as down.
It’s even possible that your neighbours’ band could be increased, although this is rare. This is why it is crucially important you do BOTH of the checks, and are especially careful if you’ve added an extension or something that increases your property’s value.
In terms of you being eligible for money, by far the most important check is the Neighbours Check, yet the secondary Valuation Check is useful for seeing whether your band is too high or your neighbours’ are too low.
Use the table below to see how strong your case is, to help you decide if it’s worth it.
Step 4: Challenge!
If you’re convinced your property band’s unfair, it’s time to challenge it.
If you’re in England, Gov.uk helps explain how to go about challenging your council tax band. You can either contact the Valuation Office Agency (VOA) directly at which point you’ll be told how your band was decided, and have the opportunity to explain why you believe it is wrong and how it should be altered.
Alternatively you can check your band by entering your postcode and selecting your address from a list. Then you can click on the link asking if you think your council tax banding is wrong and you’ll be given the option to fill out a checklist which suggests reasons you could challenge.
Remember the formal challenge checklist is more a safety check before doing the challenge. It’s got very limited value in your appeal. However, if you source actual sales prices from around 1991, that’s stronger evidence.
A: You get told you can’t challenge it
Many people get told they can’t challenge their banding, as they’ve been in the property more than six months. If this happens to you, don’t worry. The Local Listings Office has a legal duty to ensure all properties’ bands are correct, which means, if pushed, it should investigate and alter the Valuation List if it believes it’s required.
So if you’re told you can’t appeal, write a letter politely explaining, “I am writing to tell you I believe the council tax banding list of my property is incorrect, my house is in the wrong band, and I ask that you investigate to check, and correct it if it is in the wrong band.”
This has worked and does work, though there are no guarantees. It can need some perseverance and you may only get a band change going forward, but no backdated payout. If it still doesn’t help, you could complain to the Adjudicator’s Office, which covers complaints about VOA administration (such as mistakes or misleading advice, not disagreements with its decision).
B: Your challenge gets rejected
If you challenged your banding and were rejected – and you think it’s wrong – you’ve got three months to appeal to the Valuation Tribunal.
Yet remember, this check and challenge isn’t a guaranteed system. The two checks are a strong indication that you should consider challenging your banding; but that doesn’t mean it will always actually be changed. If you’ve a compelling reason to take your case further – and the evidence to back it up, it could be worth appealing. Remember, the ‘valuation check’ calculator can’t be used as evidence for house values in 1991, but if you can get actual sale prices from that time, this can be used.
Gov.uk provides further details on the Valuation Tribunal’s process. If it decides against you, it’s almost certainly time to give up. You do have a final right of appeal through the High Court if you really want it (though you’d need to prove the Valuation Tribunal made an error in law, not just that you disagree with what it said).
C: You succeed!
Expect to have your band lowered and ensure you get a backdated rebate from the moment you moved into the property (or 1993, whichever is later). You may also want to consider contacting previous occupants, as they should be entitled to a payout too.
Ensure you’re getting council tax benefits & discounts
Depending on where you live, here are a few options to help manage your council tax bill:
Are you eligible for money off your council tax bill?
In April 2013 the system of council tax benefits was localised, meaning each local authority now decides what support to offer its residents. Therefore, some of the discounts and benefits below may not be available in your area – contact your local authority to check.
Council tax band changes aren’t the only way to save money. Under certain conditions you’re able to get a reduction on your council tax bill, or possibly be exempt altogether. If any of the following circumstances apply to you, contact your council immediately as you need to apply; reductions are not deducted automatically.
Do you live alone?
The full bill usually assumes at least two adults are living in a property. So if you live alone, or are the only adult (disregarding anyone in full-time education), you may be eligible for a single person’s discount, meaning a 25% reduction.
Bearing this in mind, tell the council as soon as possible if your circumstances change through a housemate/lodger leaving, becoming a student, separation, divorce, or the death of a partner/spouse.
Are you on a low income?
If you’re on a low income (and don’t have much in savings) you may be able to receive council tax support to help ease the burden. The 10-Minute Benefit Check-Up will assess your eligibility and suggest if you may be entitled to any other financial support.
If you’re in extreme hardship, your local council has the power to reduce your council tax bill to zero, but you will have to prove this beyond reasonable doubt. Each case will be looked at on its merits.
Your bill could also be reduced by applying for the Second Adult Rebate if you share your home with someone who is aged at least 18, (they can’t be your partner) on a low income and not paying rent or council tax themselves.
Is your property being renovated?
For unoccupied and unfurnished properties which need or are undergoing major repair work to make them habitable, you may be able to claim a council tax exemption.
The council’s likely to send you a completion notice if your home has had major repair works. The notice details the date the council thinks your property was finished. You’ll need to pay full council tax from this date.
Is your property empty?
You’ll need to pay council tax if your home’s empty, but your council may give you a discount, at its discretion. You won’t have to pay council tax if:
o The homeowner is in prison (unless for not paying a fine/council tax The owner is in a care home/hospital
o The property has been repossessed
o The owner has died (council tax isn’t charged for up to six months after probate is granted)
o The home cannot be lived in by law
If your home’s empty (and unfurnished) for two or more years, your council can charge an extra 50% in council tax if your home’s in England or Wales. If it’s in Scotland, this premium can be charged after a year, and it can be up to an extra 100% (so effectively your council tax could be doubled!).
If you’re in the armed forces and stationed away this premium doesn’t apply.
Do you have a ‘granny annexe’?
If your home has a ‘granny flat’ or similar extension, then you’re entitled to a discount of 50% on the annexe’s council tax bill, provided it’s in use either as a residence or used by the main homeowner. You’ll still pay council tax as normal on the main house.
Do you have a second home?
You’re liable for the full council tax on a second home. However, you could receive a reduction from the appropriate council. Second homes must be furnished to qualify.
Do you have a disability or are you a carer?
Reductions for disability may be available, for example, if for accessibility purposes you have to live in a large home or you’ve had to make modifications. People with severe mental illnesses are also exempt from council tax. Live-in carers are exempt if they look after someone with a disability who isn’t their partner for an average of at least 35 hours a week.
Further information on council tax reductions, and a guide to claiming these, can be found on the Gov.uk website.
Get student council tax discounts
If you’re a full-time student living alone or with other students you don’t need to pay council tax, whether there’s two, three or even 10 of you living together.
Live with a non-student?
If a student lives with a non-student, the student is disregarded, so council tax could be reduced as if only a single person lives there. So the non-student may get the 25% single person’s discount. But this poses a moral dilemma.
Is it fair for the non-student to pay the entire 75% due, or should the student contribute?
From the student’s perspective, they wouldn’t pay anything if their housemate was also a student. From the non-student’s perspective they’d only pay 50% of the bill if their housemate was also a non-student.
Therefore our suggestion is to split the 25% difference between the two, so the non-student pays 62.5% and the student 12.5%.
Live with more than one non-student? Here, while the student again is exempt, because there are two non-students the house has to pay the full 100% charge. So again it gets complex – the student hasn’t added to the council tax bill, but nor has their presence resulted in a discount.
You’ll need to decide if and how you want to split it, though the legal stance is that full-time students aren’t liable for the bill if non-students can’t or don’t pay.
You need to apply to your local council for these discounts, they aren’t deducted automatically. To apply, visit Gov.uk.
Pay council tax bills over 12 months, not 10
Many people have complained to us that council tax is paid over 10 months rather than 12, making monthly budgeting difficult (as you pay monthly for 10 months then get a two-month holiday).
In April 2013 the Government announced all councils in England must allow you to pay your council tax over 12 months.
However, we’ve heard there are worries that as it may impact their cash flow, some councils may not go very loud on telling people about this option. If you want to change how you pay, it’s safest to contact it yourself.
How do I do this? If you’re resident in England, contact your local council and tell it you want to change to the new payment schedule.