Property Alterations give rise to Council Tax increase – but only for the new owner!

Did you know that Regional Assessors monitor the Building Control Register? They monitor it to find out about property alterations requiring a Building Warrant. They then decide if the alterations increase the value of the property.  If they do, they will increase the Council Tax Band. However, the new Council Tax Band only applies when the property is sold.

Clients may decide to make some property alterations rather than sell and move on. They may like the location, their neighbours and their home. Sometimes,improving is better than moving. However, clients rarely consider the impact of their property alterations on their Council Tax Band. Arguably, they don’t have to!

Regional Assessors are responsible for setting and managing Council Tax Bands. They do this on behalf of Scotland’s local authorities. The Assessors maintain The Council Tax Valuation List.

When will someone find out about the increase?

The new owner will find out about the increase when they receive their Council Tax demand. The higher Council Tax Band leads to higher charges. The Sales Particulars probably didn’t mention this!

Regional Assessors use the powers contained in The Council Tax (Alteration of Lists and Appeals) (Scotland) Regulations 1993. Regulation, 4(1)(a)(i) says “no alteration of a band shall be made unless there has been a material increase in the value of the dwelling and it has subsequently been sold”.

Once it’s been decided the property alterations give rise to an increase in the Council Tax band, the next stage is to apply it. Regulation 19(1) determines the effective dates. It says “any alteration of the list effected so as to reflect a material increase in the value of a dwelling shall have effect from the day on which the first sale of the dwelling was completed”. In other words, the new Council Tax banding only applies when the property is sold.

Property alterations have no impact whatsoever on the Council Tax banding for the current owner. The Council Tax banding will remain exactly the same until the point of sale. It’s the new owner who will get the “surprise” of finding out the Council Tax band has increased.