The murky world of council tax valuations: The couple who challenged their council tax - and hiked their neighbours' bills

• Raising neighbours' council tax bills is a little known risk of querying bands
• 4,000 homeowners query their band through an independent tribunal every year

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Block bill: Pearl Court in Eastbourne

Pearl Court in Eastbourne is a wonderfully imposing four-storey apartment building that used to be the living quarters of staff who worked at the old Pearl Assurance firm.

The plush larger flats were home to the company managers, while the smaller ones were for those lower down the ranks. Today they’re privately owned and much sought-after.

Those who live in the 28 apartments, just a four-minute walk from the seafront, are largely retired or close to retirement. But this is a community that is divided.

It’s been split over the innocent actions of one of the residents who simply wanted to dispute a high council tax bill. It’s left many neighbours fighting a time- consuming court battle and others with a £362 hike in their annual bills.

It has proved an example of the seemingly arbitrary and secret way in which council tax rates are decided - and how ordinary residents can go about challenging them.

 

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The man at the centre of this row answers his front door in a brightly coloured, striped dressing gown. He wants to remain anonymous - though most of his neighbours know exactly who he is. He’s polite, charming and, if anything, a little bit shy. He seems mortified he hasn’t had the chance to get dressed up for my unannounced visit.

His living room has bookshelves from floor to ceiling, there’s an expensive-looking couch and a table full of family photos in silver frames. So how did the actions of this charming man cause such a rift in this peaceful community?

HOW TO CHALLENGE COUNCIL TAX BANDS

The council tax band of every house in England and Wales is listed on the Valuation Office Agency - or, in Scotland, the website of the Scottish Assessors Association. 
Once you know which band your house is in, check the banding of neighbours with similar-sized properties. Try to estimate how much your house was worth back in 1991, the year on which council tax banding is based. You can do this in two ways.
Property websites such as Zoopla and Rightmove provide free historic sales information. If your home, or a similar one owned by a neighbour, was sold in 1991, that should be all the evidence you need. If there were no sales, you may have to work backwards. 
Look at the historic house price data for websites such as Nationwide BS and Halifax. This will tell you how much your house value has gone up by since 1991. You can then work out what it would have been 23 years ago.
To challenge your banding, write to your local listing officer at the Valuation Office Agency or fill in a form on its website. If your challenge is rejected, you have three months to appeal to the Valuation Tribunal. 
If you win, you will get a  sum backdated to when you moved in. But remember — your band can be moved up as well as down.

The man and his wife moved into one of the larger flats at Pearl Court three years ago. They paid £299,995 for the four-bedroom flat, which was in council tax band E. Almost immediately they realised other similar-sized flats were in council tax band D.

Based on current rates from Eastbourne Borough Council, a band D property pays £1,630 a year and band E £1,992 a year. So, thinking this was unfair, the couple challenged it.

 

This is done by contacting the Valuation Office Agency, which is the government body in charge of classifying every property in England and Wales into one of eight council tax bands, A to H. Most council websites have a guide on how to do this.

The man says: ‘I honestly thought that getting my council tax reduced would be an open-and-shut case.

‘Two other residents in flats the same size as mine had recently been successful in getting their band lowered to D.

‘I never dreamed it would cause trouble for anyone else.’

The initial decision from the Valuation Office Agency was that the flat was in the correct band. So the couple took their case to an independent tribunal. Some 4,000 homeowners did the same last year - but only a quarter were successful.

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Council tax bands: When challenging your home's band, the Valuation Office Agency appoints a listing officer to look at the size, age and location of your property 

Woman challenges her council tax...and ends up paying MORE

The man admits to being woefully underprepared. Other people disputing their council tax bands had gone in armed with evidence of other property sales in the neighbourhood - the couple had nothing.

The independent panel that sits for the tribunal backed up the initial finding that the council tax band was right. And that seemed to be the end of it.

But it was once the local listing officer at the Valuation Office Agency heard the judgment that the bombshell came: they decided that, in fact, the problem was that many of the other homes in Pearl Court were valued wrongly. This is a little-known risk of challenging a valuation.

While an individual can challenge their band, if it is changed this usually triggers a review of all their neighbours’ homes, too. And the tribunal doesn’t just decide whether a homeowner’s property should be in a lower band or not - it can also rule that their property should be in a higher band. As a result, at Pearl Court, 16 of the 28 flats were moved into a higher council tax band.

Letters were sent out to all of them. The council, which sets the rates but not the band, was also notified.

THE BATTLE FOR LOWER TAX

There are four blocks at Pearl Court, each with a main door which you can get through only if you are buzzed in by a resident. There is no one about on the morning I visit, so I start by pressing the button on the intercom for flat one. Many people are not home.

 

With those that are, some are not keen to talk at length - though everyone knows what a valuation tribunal is. I bet you wouldn’t get many flats in Britain where that is the case.

Eventually, an older lady invites me up. She’s about to go out for a lunch date. Like most of the residents, she’s happy to talk to me, but wants to remain anonymous - no one wants to rock the boat any more than it has been already.

She didn’t know there was an issue with her band until the letter arrived through her door. She says: ‘It just doesn’t seem right that someone can just change our council tax after two decades and then put the onus on us to prove to them they have made a mistake.’

The letter, which arrived in February 2013, said the new band would apply from May 2013 - giving her three months to find an extra £30 a month. It did at least contain a leaflet about a right to appeal.

‘I wouldn’t have known what to do. Fortunately, everyone here decided to fight it en masse,’ she says. ‘Some are computer literate and prepared to put in the hours needed to research how to appeal.

‘But many of the older ladies living here were terrified - they were worried they’d be hit with huge legal bills or that their bill might increase even more.’

HOW VALUES ARE WORKED OUT

When challenging your home’s band, the Valuation Office Agency appoints a listing officer to look at the size, age and location of your property. It uses this information to help estimate how much your home would have sold for in 1991 (or 2003 in Wales).

A band-D property was worth between £68,000 and £88,000. while Band E was from £88,000 and £120,000. Challenging these historic valuations is made simpler if a similar property was sold in 1991. At Pearl Court there were no homes sold in 1991; in fact, there were also none sold in 1990, but two in 1989.

More problematically, between 1989 and 1995 property values in the area plunged. And all the blocks at Pearl Court are different. Homes in block D vary and are as small as 87 square metres, but in block C they can be as big as 126 square metres.

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Varying costs: Residents in an area pay different amounts on council tax, which goes towards the upkeep and essential services

When the neighbours tried to get information about why their valuation had changed they hit a brick wall. One of the residents who put together their case says: ‘It was unbelievably confusing and the Valuation Office Agency refused to help us.

‘We asked time and time again for them to give us copies of the so-called evidence they had proving our homes had been in the wrong band all this time, but they refused. These are our homes. We have a right to know how they arrived at their decision.’

It began a Catch-22 situation. The residents weren’t allowed to see the evidence the valuations office had used to hike their band unless they made a formal appeal. But the residents didn’t know if they should make an appeal without seeing the evidence. They had to do their own research and build a case to present to the tribunal. In the end, 11 people made an official appeal. The case would be heard in two parts.

On January 24 this year, the first six residents travelled 20 miles to the Civic Centre in Uckfield, West Sussex, where the tribunal was held. Some spoke for an hour. At the end, the tribunal panel members went away to consider their decision.

Several weeks later, the 11 residents received a letter. The majority had won their case. All of the flats in blocks B and C would stay as they had been in band D. They received a refund for nine months’ worth of extra council tax they’d paid. But blocks A and D - which have bigger flats - would be moved into band E.

What’s noticeable from chatting to the residents of Pearl Court is that few actually talk about the money. For them, this has become a matter of principle and about how unfair the council tax band system can be.

A spokesperson for the Valuation Office Agency (VOA) says: ‘We cannot comment on individual cases. As part of their statutory functions, local councils will inform the VOA of any changes to properties such as extensions, demolitions and newly built property.

‘If the VOA then makes any band changes, the taxpayer has a legal right to challenge this by making a proposal.’

But the couple who started all the trouble at Pearl Court now have to live knowing they’ve put an extra £362 a year on some of their neighbour’s council tax bills.

As I’m leaving, the man says: ‘It’s just awful. ‘I’m now known as that neighbour who rocked the boat for everyone and caused my neighbours distress - many of whom are elderly women who live on their own. ‘I usually have such great respect for the law, but there is something very un-English about how unfair this whole saga has been.’