“The municipal tax system is ripe for reform”
The introduction of the housing tax was a matter of the past and the pan after the complete disaster of the replacement of domestic tariffs by the Community Tax – or Poll Tax.
The domestic rate system was a mess. The assessed values ââwere meant to be linked to a rental value of the property and had to be reviewed periodically, but had not been.
When my wife and I bought a house in 1986 it had an assessed value of around Â£ 370, but many houses in the same part of the same town, which were selling for 60% more, had a assessed value of around Â£ 370. ‘around Â£ 180. The obscure rating system made it almost impossible to verify how a rating was obtained.
Shortly after purchasing our home in the spring of 2016, we received a notification from the appraisal office agency informing us that they intended to review their housing tax allocation. Six days later which included a weekend, they informed us that they had completed the exam and moved our house from Group E to Group F.
I asked for an explanation of their decision. It took nine weeks to get a response. The response was as pointless and uninformative as possible. In writing my appeal, I compared the purchase price of my house and its banding with all the goods sold in our zip code area over a nine month period with our transaction in the middle.
In principle, houses sold at the same price should belong to the same housing tax bracket. What I found was a very large overlap of the bands, so large that about half of the properties sold would have had to move up or down a band to get to the position where the properties of the same value were in the same bandaged. Housing tax no longer has a clear link with value. The banding is as inconsistent as the assessed values ââwere before they were replaced by Poll Tax.
Cumbrian peers Lord Campbell-Savors and Lord Clark are right to raise concerns about the housing tax. A thorough review leading to its replacement by a fairer system is urgently needed.