The Taxing Issue of Valuation
An Edinburgh resident's successful appeal against the council tax banding of his property earlier this week has once again raised the question of whether the existing method for property valuation remains viable in today's market.
Since the introduction of council tax in 1993 there has been no revaluation of the eight price bands used to determine the charge. Existing properties and new developments are both priced according to their perceived value almost 16 years ago.
Unfortunately, calculating property values accurately this far back, across a city such as Edinburgh, is a thankless task. To put things into some sort of perspective, assessors are often being asked accurately to determine how a particular property built today would have been valued at a time when Chesney Hawkes was topping the charts.
In the first instance, it is very difficult to obtain good quality data on house prices in Edinburgh dating back as far as 1991. Whilst Edinburgh Solicitors' Property Centre (ESPC) has been helping to sell homes in the Capital since 1971, constraints of technology meant that it only became possible to record the depth of data needed for this operation in the last ten years.
Other possible sources of information that the Council could turn to such as the Registers of Scotland simply can not provide the level of information on individual properties one would require accurately to backdate prices on the wide range of property types available in the City.
In addition to the problem of finding accurate data with the necessary level of detail, the variables upon which property prices depend further complicates matters for assessors.
First, there are significant differences in the rate of house price inflation in Edinburgh depending on both the type of property and the area in which it is situated. For example, over the last twelve months ESPC has seen the average price of small one-bedroom flats grow at around double the rate of the increase witnessed across the Capital for all property types.
Additionally, the type of heating in a property, whether it has double-glazing, any changes to parking access, and alterations to a property such as a conservatory or loft conversion must all be factored in to achieve an accurate valuation.
ESPC research has also shown that the school catchment area within which a property lies can massively impact its value. With catchment areas of Edinburgh schools currently being reviewed, this will provide yet another obstacle for assessors to overcome.
One final issue muddying the water is that the value buyers now place on certain factors today may be very different to how they would have assessed them in 1991. Growing concerns about global warming for example mean that we are hearing anecdotal evidence of house hunters placing increased emphasis on the energy efficiency and carbon emission levels of a home - as well as its height above sea level!
All of this means that in the absence of either a revaluation of council tax bands, or a complete overhaul of the current system, this recent case is unlikely to be the one and only contest over council tax banding brought to the courts by Edinburgh residents.
Issued by ESPC(UK)Ltd marketing & public relations
For further information, please contact:
Ron Smith
tel 0131 624 8520 email marketing@espc.com