Band on the run
Remember 1991? How about some pop culture references to jog your memory: Nirvana's Nevermind was released, the Soviet Union collapsed, Freddy Mercury died, and interest rates were 10.38%.
Oh, and your house was assessed and put into a council tax band.
And now, more than 15 years later, nothing has changed. Your council tax pays about 25% of the expenses of services like police, fire brigades, schools, and public transport, among others (the rest comes from central government grants and business rates). Therefore by all indications, the council tax is going to be around for several more years, maybe decades longer.
Since this is something that's going to be part of our lives for the foreseeable future, we should make damn sure that we're not overpaying. Assessment of homes was often done by contractors driving down a street and estimating. Many people are now challenging the status quo, being re-banded to a lower rate, and being compensated for years of excess back taxes.
Doing some research and possibly requesting a rebanding assessment could save you thousands of pounds (see The SmarterGroup Blog). Even if you don't want to go through having your house rebanded, you may be eligible for a discount.
Here are some scenarios where you may be eligible for council tax discount ranging from a percentage discount to full exemption:
1. You own a second home for which you pay council tax (10-50% discount).
2. You are disabled, or a carer.
3. You are a student (exemption).
4. Your house is empty for renovations (12 month exemption)
5. You are one adult living with several students (25% discount).
6. You live alone (25% discount)
7. Your residence is occupied by members of the armed forces.
If you want to challenge your council tax band, here is what you should do:
1. Find out what your house was worth in 1991 (try Nationwide house price calculators, for example)
2. Talk to your neighbours: are they in a lower council tax band than you? Keep in mind that you could be in a tax band that's too low, and if you get "promoted" to a higher tax band, it could affect your neighbours' council tax band. And then they'll hate you.
3. If you're really sure that you were placed in the wrong band, get in touch with your local Borough Council and ask for a reband assessment. They won't come looking for you.
If you are correct and you are rebanded lower, you'll pay less in council tax and get a back-dated refund from when the council tax was placed on your property, or when you moved.
But the question is, what effect would mass rebandings have on communities? It's tough to say. If everyone were rebanded, presumably some people's council tax would increase and offset losses from those whose council tax decreased. But the current spate of requests for rebanding are going to be self-selected by those who feel confident that their rate will drop.