An estate agent is suggesting that the goverrnment’s new price index, coming into force in June, could be used to revalue council tax bands.
Charles Curran, principal and data analyst Maskells Estate Agents, says council tax is calculated on bands based on house prices in 1991 and makes no allowances for price increases over the past 25 years.
But Maskells’ analysis has found the new index will use data from the Valuation Office, which has details of each property in the UK.
Previously, revaluing property for councils would have required an army of surveyors which would have been expensive - not to mention politically difficult for any party in government.
However, Maskells says “in theory, the new index will make it possible to appraise every home in the country at the touch of a button.”
“Council tax no longer has any link to the value of a property in real terms, particularly in London and the south east. Instead, the government rely on stamp duty to raise taxes on property, which is only paid if people move” says Charles Curran.
“While the new index may be of little use, or interest to the market itself, we feel certain it will be of great use to government. Certainly this new index would allow local authorities the necessary data to consider revaluing council tax which would provide a more meaningful and sustainable revenue for cash strapped local authorities.”
Maskells - which is a prime central London agency - gives the example of a buyer of a £5m house who would currently pay £513,750 in stamp duty and only £2,085 in council tax in Kensington & Chelsea.