There’s an assumption in here which doesn’t work given the way in which local authority finances work. One that is making the idea of council tax revaluation appear much more difficult than it is:
A revaluation of council tax bands – though logical – would be similarly difficult. Homeowners would presumably be able to challenge what band they had been placed in. Millions, particularly in the South East, would be asked to pay much more. Cue mass complaints, council computers crashing, protests outside town halls and furious letter-writing to MPs.
Well, no, not really.
Yes, obviously, SE property prices are much higher than they were back in the 1990s when the current valuations were set. But it’s important to understand that council tax is not a national tax. The business rates – UBR – is national, in that revenue goes off to government and is then returned/doled out across council boundaries. Domestic rates/council tax is not national.
The money raised goes to and finances the council in whose area the tax was raised from. So, a general rise in the valuations of housing in a locality doesn’t mean a rise in council tax at all.
Well, OK, the council might use it as an excuse but that’s another matter.
Consider, it costs £100 to run the council. Local properties are worth £1,000. OK, that’s a 10% per year tax on valuations to finance the council. Property prices double to £2,000. It still only costs £100 to run the council. The revaluation just means that the rate can fall to 5%.
And here’s the thing. Sure, there have been very large relative changes in property valuations over the past 30 years. But they are mainly – near exclusively in fact – within local authority areas. All of Maidstone has gone up in value, all of Bradford has fallen (say) and as we don’t reallocate domestic rates between Bradford and Maidstone that doesn’t matter a damn. We’re still trying to collect the cost of running Maidstone from housing in Maidstone, for Bradford from Bradford.
The big – extreme even – changes in property values have near no implication at all for domestic rates bills. So why not get on with doing it then?