Alterations to property give rise to Council Tax increase for new owners

Regional Assessors and responsible for setting Council Tax bands and we’ve discovered they monitor the Building Control Register. They do that to find out what alterations requiring a Building Warrant have been carried out to which property. They will then decide whether the alterations give rise to an increase in the value of the property which, in turn, causes an increase in Council Tax when it’s sold.

Regional Assessors in Scotland have the responsibility to set and manage Council Tax banding on behalf of Scotland’s local authorities. This includes a statutory duty to maintain The Council Tax Valuation List.

We’ve heard recently of purchasers taking entry to their new home and receiving a “surprise” from the local authority in the form of an increase in the Council Tax Banding of the property. This, of course, leads to a higher Council Tax Bill.

This power to reassess the Council Tax Banding is contained in The Council Tax (Alteration of Lists and Appeals) (Scotland) Regulations 1993. Regulation, 4(1)(a)(i) states: “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”.

If the Assessor decides that there has been an alteration that gives rise to an increase in the Council Tax Banding, Regulation 19(1) will be invoked. Regulation 19(1) determines what the “effective date” will be- in other words, when the increase will take effect. 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”.

We stress that the alterations have absolutely no impact on the owners of the property who carried out the alterations. The Council Tax Banding will stay exactly the same until such time as the property is sold.

However, if you’ve carried out any alterations to your property that require a Building Warrant to be granted when you’re selling your house, you must let us know. We should give any purchaser advance notice that the current Council Tax banding may increase as a result of those alterations.

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