Continuing with our series on the First 90 Days, we are answering the most important (and occasionally forgotten about) questions for those moving into a new home.
The council are the local management for your area. They provide local services and facilities and their budget and agenda will change depending on where you live. If you have moved to a new borough, it’s worth looking up who your elected official is and what council tax band you fall under.
Council tax is simply the local taxation collected by the authorities – specifically, a tax on domestic property. The money collected from council tax is used to pay for local services. These range from repairs, waste disposal, local emergency services, and pretty much every public service in your borough. You should be paying council tax if you are over 18 and rent or own property in the UK.
You will need to contact your local council to let them know you have moved into the area. They will then send you a bill and explanation of your tax band. Not every property has to pay council tax, however, so you would need to ask your council about that, too. You can find your local council by entering your postcode here.
The Valuation Office Agency define what tax bands different households are applicable for. Houses are placed in their tax band based on their value from 1991 in England and Scotland or 2003 for Wales. If you’re not sure what the property was worth in 1991, don’t fret. You can use Nationwide’s House Price Calculator to work it out. Just put ‘2018’ in Valuation Year 1 and ‘1991’ in Valuation Year 2, then add the value of your new house and pick your region. For instance, if you’re in Greater London, the percentage change is -83.71%, so a £500,000 property would have been worth £127,010. Based on the different tax bands in England (which you can find here), that would put the property in tax band F.
The amount you pay for council tax doesn’t just depend on the value of your property, but also your borough. If we look at the example above and assume the property is located in Tower Hamlets in London, then we can use the Which? Council Tax Calculator to find out the actual annual figure that needs to be paid. In Tower Hamlets, a Band F property needs to pay £1,850p/a. Meanwhile, if the property is based on Southwark, a Band F property would mean paying £1,921p/a. Make sure you’ve checked how much you think you should be paying and compared it to what the council have told/will tell you that you should pay. If the figures differ, give the council a call to find out their reasoning.
If you think you should be paying less or if you believe you should be in a different tax band, you can contact the Valuation Office Agency to appeal to get your property revalued. It’s possible that the property has dropped in value since 1991, such as if it was previously a large, several-story property and has since been converted into flats. Or, the value of your property in 1991 could have been incorrect – this would be evidenced by neighbouring similar properties being in a lower tax band. Do your research by checking the 1991 valuations of yours and nearby properties before calling the Valuation Office Agency, though – the last thing you want is for it to turn out that you actually belong in a higher tax band!
Until the mid/late 1960s, people would need to pay their council tax with cash or cheque. Many councils no longer accept cheque payments, but cash payments are still available by using ‘Paypoint’, ‘Payzone’, or ‘Quickcards’ at post offices, banks, newsagents, and convenience stores. However, the most popular and convenient method is online via direct debit.
Enter your postcode into this link to find out more about your payment options and how to set up a direct debit online.
There are a few council tax discounts and exemptions available for those that qualify. These include:
If a property is empty, then it may qualify for a discount. However, if it has been left empty for two years or more then the council could increase the tax by 50% (unless it’s an annexe or you’re in the armed forces). In certain circumstances, empty properties don’t need to pay any council tax. These include homes:
The local council officials are chosen by election, so if you have any problems with the way things are being run you can have your say in the local elections. Since you are moving into a new area, it’s important that you register to vote as soon as possible. This isn’t just so you can have your say, but also because it helps with your credit rating. You’ll want to keep a good credit rating when the time comes to remortgage for a better deal.
That’s all the important stuff to know about council tax when you’re moving into a new property. If you are a first-time buyer and have not been renting previously, then it might seem like a very inconvenient expense, but it’s what keeps the local services running and repairs ongoing, so it’s definitely better with than without! Keep up with our First 90 Days series by following our Twitter and Facebook pages. If you have any questions about mortgages or first-time mortgages, don’t hesitate to get in touch via our contact page!