03 September 2004
Welsh councils should not use the revaluation of the country's home values as an excuse to impose unreasonable tax increases.
That warning came from Finance, Local Government and Public Services Minister Sue Essex as the new bands for each home were announced on September 1.
Transitional relief will mean that taxpayers will not pay more than a one-band increase next year and a two-band rise the year after, she said.
Valuation Office Agency staff have carried out the revaluation based on property prices for the principality's 1.3 million homes as at April 1, 2003, the first revaluation since the tax took effect in 1993.
Essex said: 'I want to reassure council taxpayers that revaluation in itself was not undertaken as a reason to increase council tax levels. However, it is logical that homes that have increased in value greater than the national average are more likely to move up the banding system.'
The Assembly has introduced a new top band, 'band I', for homes valued at more than £424,000. Band A, the lowest, applies to homes worth less than £44,000.
Essex told Public Finance: 'We have done the exercise with the Welsh Local Government Association and are clear that this is not an excuse to increase council tax.'
She said Wales had traditionally had lower rises than England, but thought 'there is an acceptance on all sides that really high increases, such as those seen in Wandsworth, are not acceptable'. Dai Lloyd, Plaid Cymru's shadow local government minister, called for a switch to a local income tax.
He said: 'Some pensioners on low fixed incomes are living in properties that have seen their valuations go through the roof, and are seeing their council tax increase by two or three bands.
Rebanding the council tax is merely tinkering with a manifestly unfair system of tax.'
Revaluation in England is due to take effect on April 1, 2007 and the Office of the Deputy Prime Minister has said this will be 'not about increasing overall tax revenue, but about achieving a fairer distribution'.
PFsep2004
