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February 13, 2024

Time to revalue

Despite commitments from successive governments to reform council tax, for one reason or another, when the devil meets the detail of what that reform might look like, the plans always get shelved. The options are undoubtedly complex but everyone agrees that the first step must be a complete revaluation of all domestic properties on which the current system is based. It’s more than three decades since the last revaluation. STUC has coordinated an open letter to all political parties calling for this revaluation while Andy Wightman has helpfully proposed the means of delivering it. Time to bite the bullet.


Andy Wightman, Land Matters

Today, the STUC has published an open letter to Scotland’s political parties urging them to revalue Scotland’s domestic property in order to provide an accurate tax base for the Council Tax which is still based on property valuations from 1991.

The Commission on Local Tax Reform found that 54% of properties in Scotland were in the wrong Council Tax band. it is a fundamental principle of fair taxation that the tax base should be accurate and up to date. No-one is still paying income tax, for example, on the income they received in 1991 or VAT on the goods they purchased in 1991.

With modern technology, regular revaluations are straightforward. Most titles are now on the Land Register (see image above showing registered titles around Davidson’s Mains in Edinburgh) and the current values can be assessed by reference to the last year of purchase and applying house price inflation indices. Mass appraisal techniques can be used to fill in most of the gaps with manual valuations for properties with outlier characteristics.

The only thing standing in the way of updating the Council tax tax base is the political will to initiate such a revaluation.

What is important to understand is that this does not need any primary legislation and can be achieved by a straightforward Scottish Statutory Instrument (SSI) or secondary legislation in the Scottish Parliament. Ministers could go further and could amend the bands to transform the Council Tax from a regressive tax to a proportional one.

All of this could be in place for the financial year beginning April 2025 with a revaluation conducted 2024-2025 and the new system up and running in time for the financial year 2026-2027.

I have decided to help Ministers by drafting the relevant SSI which achieves two important things.

Firstly, it amends the multipliers so that they are proportionate to property values.

Secondly it introduces new £10,000 valuation bands (so that valuation only need to be accurate within +/- £5000).

Thirdly, it provides for a revaluation to be conducted from 2024 with provisional valuation in place for Autumn 2025 and the new valuations and implementation from April 2026.

The draft SSI also indicates (in the Explanatory Notes) that a further Order could be introduced to create a five year transition so that those facing higher bills can see the increases staged over five years.

Further reforms by SSI can also, for example, allow for deferral of Council tax liabilities in certain circumstances until the sale of the property.

What are we waiting for?

The draft SSI can be downloaded from the link below.

The Council Tax (Substitution of Proportion and Valuation) (Scotland) Order 2024