FINANCE
If only one person lives in a home there is a single-person discount of 25%. You can also get a single-person discount if all the other people living in the home are what is called “disregarded persons”. Disregarded people include children, full-time students, student nurses and some apprentices. If you have a disability and your carer (who is not a spouse) lives with you, that carer will be disregarded, and if you have someone living with you who is severely mentally disabled – a grandparent with dementia, for example – they are disregarded. If your home is in a higher council tax band purely because it has been altered or extended for a person with a disability, the charge can be reduced by one band. You will sometimes see “no win, no fee” lawyers suggesting that it is easy to get your council tax band lowered, but in reality this is seldom the case, and asking to be revalued risks your tax going up rather than down! MoneySavingExpert has a good guide to explain the limited reasons when you might consider challenging a home’s band, at moneysavingexpert.com/reclaim/ council-tax-bands-change/. You should also be aware that most councils charge council tax on empty properties, so if there is an overlap between you buying a home and ending a rental tenancy you may legitimately be charged twice, especially if you are moving council areas. If you are buying a “doer-upper” you will also have to factor in paying council tax, in some areas even if the home is not habitable. If it has stood empty for a long time, councils can even charge up to 300% of the normal council tax to discourage empty homes, but this is based on the house, not the ownership, so buying a dilapidated wreck that has stook empty for years could be even more expensive! If you are liable to pay council tax and fail to do so, the penalties are severe. If you miss a payment you will be given a notice to pay within seven days, otherwise you will have to pay the whole year’s council tax upfront. Councils can take you to court and use bailiffs or demand that the money is paid by your employer from your wages. You could even end up in prison! If, once you have moved in, you have difficulties paying, you can ask for the payments to be split into 12 monthly payments rather than the usual 10 payments, or apply for Council Tax Support if, for example, you have suddenly lost your job and have little in the way of savings, although the bar is set quite high to receive any help.
however. Council tax is paid, not directly to the Government, but to local councils to pay for services such as emptying the bins, social services and keeping the street lights on. As a result, the actual amount you are charged varies according to the council area that you live in and can mean that the owners of modest homes in poorer areas can actually end up paying larger bills than those occupying large homes in affluent areas. Nick Rushton, leader of Leicestershire County Council, recently complained, “A system where a person living in a £1m Westminster property pays just £1,000 in council tax, compared to someone paying £2,500 in a £375,000 property in Coalville in Leicestershire, cannot be fair.” At the moment, the most expensive place in England to pay council tax is Rutland, a rural unitary authority in the East Midlands, famous for the beautiful Rutland Water nature reserve. In Rutland, the average house price is a modest £412,574 but the band D council tax charge is £2,422 a year. It is closely followed by Nottingham at £2,412, both Lewes and Dorset at £2,388 and Wealden in East Sussex at £2,363. By way of contrast, the cheapest place in the country for council tax is Westminster, with an annual charge of just £914 despite an average house price of £1,822,456. Behind Westminster come Wandsworth at £921, the City of London at £1,146, Hammersmith & Fulham at £1,306 and Kensington & Chelsea at £1,442. Nineteen out of the 20 cheapest council tax locations are in London (unless you fancy moving to the Isles of Scilly), so in general it may help to off-set the more expensive cost of homes in the capital. However, you could find by moving your new home search even by a few streets you could still save a fortune each year. Kingston, for example, is the most expensive of the 32 London boroughs, but step across the boundary into Wandsworth and it’s a different story. A band E house in Florence Terrace SW15 3RU, on the edge of Kingston, would cost £2,745.97 a year, but just a few steps away in Roehampton Vale, SW15 3RX, just across the border into Wandsworth, a similar band E home would cost just £1,117.29 each year – putting £135 a month back in your pocket. If you have already chosen a home or fixed location, then it’s worth being aware of some of the council tax exemptions and reductions that might apply.You usually have to ask your local council to apply these, don’t assume it will just happen automatically: There is no council tax at all to pay if everyone living in the home is a full- time student.
EXPERT COMMENT
We do recognise that Rutland has one of the highest council tax rates in the country, but the reason is that we receive considerably lower Government funding per head compared to other areas. The funding formula is skewed towards urban and deprived areas, and we score very low on the Government deprivation index – which is part of what makes Rutland so popular as a place to live. We are a small, rural authority with just 41,000 people in total, two small towns and a large number of villages, with a great community spirit. The funding situation is very unfair, and the leader of the council recently wrote to the Prime Minister to express our dismay and ask for improved funding. Rutland receives just £501 per household from the Government which is 40% less than the other unitary authorities, and around half the national average, which is £1,019 a household. If we received the same as other authorities we would have £9m more to spend on our £45m budget, which would make a huge difference. I would urge rst time buyers to take a look at the quality of life that Rutland can offer − council tax is only a small part of a much bigger picture.
Cllr Andrew Johnson, Portfolio Holder for Finance and Deputy
Leader, Rutland County Council
First Time Buyer February/March 2024 99
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