A group of Rothbury residents are fighting to change their council-tax bandings which they think have been wrongly assessed.
In the course of this dispute, Graham Cadwallader, a local chartered surveyor who is representing the residents, has become increasingly concerned over how new properties are assessed by the Valuation Office Agency (VOA) to provide their council-tax bands.
When a new property is built, the VOA allocates a council-tax band, based on what its value would have been on April 1, 1991 (April 1, 2003 in Wales).
You are able to challenge your council-tax band if you think it’s wrong and, if you still disagree with the VOA’s decision, you can appeal to the Valuation Tribunal.
In the case of the six homeowners of the Whitton View estate, they have no legal right of appeal because they have all lived in their houses for more than six months, which is the time limit.
The residents did not know that there was a time limit to appeal and all six left it too long to go to tribunal.
Mr Cadwallader said: “I urge everyone who buys a new house or moves to a new home to look at their council-tax band and appeal if they think it is wrong. It can be done very quickly online and doesn’t cost anything.
“If you don’t do it within six months of becoming the taxpayer, you lose the right of appeal and it is almost impossible to get it changed, even if it is clearly wrong.”
The properties in question are all three-storey terraced houses.
The residents’ claim to the VOA is based on the fact that successful appeals in the estate mean that they are paying more council tax in band E for terraced houses compared to larger, semi-detached houses, which were changed to band D by tribunal in one case and by appeal in another.
However, a tribunal decision is not binding on other houses.
Claimants Terry and Norma Tate said: “You would think that when a tribunal changes the council-tax band for one property in an estate, the Valuation Office would have to revalue the others to keep them in line with one another.”
The issue becomes even more complex when the ‘tone of the list’ is brought into play.
As mentioned before, the value of English properties is based on what it would have sold for on the open market on April 1, 1991.
This is now more than a quarter-of-a-century ago and clearly thousands of homes have been built since then.
A 2008 High Court decision showed that evidence for banding can be gleaned from decided tribunal cases, meaning primary sales evidence is not always necessary to prove a band in a list that has been established over time.
The judge said that ‘it is the case that over time valuation tribunals’ decisions will shift from a consideration of individual sales, as they were in 1991, and will develop a body of case law which establishes that certain types of properties fall within bands. Thus, in relying on the later decisions, the tribunal is not relying on specific valuations, though it was specific valuations that underlay the subsequent decisions of the tribunal.’
He added: ‘It is very important to note that the further away one gets from the 1991 list, the more appropriate it becomes for the valuation tribunal or the listing officer to have regard, particularly in the interests of consistency, to the decisions of the tribunal...’
Based on this, Mr Cadwallader compiled a list of 25 three-storey, terraced houses in Rothbury, which are all in band C or band D. These were rejected as not being comparable as they were more than 100 years old, but he asserts that the definition of market value makes no distinction between new and old properties.
In support of their valuations, the VOA’s list featured houses in Wrights Square and Mart Field, neither of which existed in 1991, and Mr Cadwallader questions how valuations can be made seemingly with no reference at all to 1991 market prices.
He said: “It is quite clear that my clients’ houses are not in line with the tone of the list and should always have been in band D. Until they are changed, they will continue to pay too much council tax. Some of them have been in the estate since it was new and their overpayment could be in the thousands of pounds.”
Also during his lengthy exchange of correspondence with the VOA, Mr Cadwallader asked for the specific valuations of his clients’ properties, only to be told that ‘there is no legal requirement for individual property valuations to be carried out by the VOA and we do not hold any for the properties as at 1991’.
He said: “I am aware that the VOA does not have to value every house, but to value none of them and make no reference to 1991 sale prices must surely be unlawful.
“I ask, how can a property be placed in a valuation band if it has not been valued? Without an exact figure, how can one decide which band it falls in?”
A Valuation Office Agency spokeswoman said: “We can’t comment on individual cases. Anyone can look up the council tax band of their property on gov.uk and, if eligible, submit a formal challenge if they think it’s wrong.
“They can request an informal band review as well – we ask customers to explain why they think it’s wrong and provide any evidence they may have to help us review the banding. We then explain the outcome of any review.”
Information about how domestic properties are assessed for council tax bands can be found online at www.gov.uk/guidance/understand-how-council-tax-bands-are-assessed