Council Tax bills to rocket after general election, warn Liberal Democrats

12.00.00am UTC (GMT +0000) Thu 31st Mar 2005

Council Tax payers in Leeds face a post-election tax bombshell, Liberal Democrats warned today.

Council Tax bills will rise by ?200 or more because house prices have risen so fast in the area.

Council tax is currently based on property values in April 1991 but the government is updating its valuation figures to take account of changes in property prices since then.

Property prices TOMORROW will be the basis for Council Tax bills for the next 10 years.

Anyone whose home has gone up more than the national average since 1991 will be moved into a higher tax band. That means bills will rise by up to 22%.

Leeds will be hard hit because house prices have gone up 158%, according to the latest research from the Halifax House Price Index. Homes could move up two, three or even more bands.

In Wales, where revaluation has already happened, some families will see their council tax bill TREBLE. That could be repeated in parts of Leeds.

Liberal Democrat Parliamentary Spokesperson for Leeds North West, Cllr Greg Mulholland said:

"Council Tax is unfair, and revaluation is going to make it worse. Just because house prices have risen in Leeds, local people will have to struggle to find hundreds of pounds extra in Council Tax.

"Both the other parties try and deny it, but they simply have no solutions to the ticking time-bomb of spiralling Council Tax bills. The biggest post-election tax rises will come from the Labour and Tory-backed plans for rebanding.

"The whole Council Tax system is bust, and it is time to scrap it. Liberal Democrat plans to replace it with a fair system based on ability to pay would cut the typical family's bill by around ?450 a year."

Notes:

1. Current council tax bills are based on property value 1 April 1991. Council tax bills from April 2007 will be based on property value 1 April 2005

2. Areas where house prices have risen faster than the national average (175%) are likely to have homes moved into higher tax bands.

3. Labour and Conservatives are committed to revaluation. Caroline Spelman, Conservative local government spokesman: 'Of course we understand that a property based tax has to take account of changes in the value of property. (Hansard, 2 March, col 992)

4. In Wales, where revaluation has happened, 33% of homes were moved into higher bands, 8% of homes moved down a band. 3 homes were moved up 8 bands, trebling their council tax bill.