Many people having a loft conversion wonder if this will increase their council tax and if they should inform the council. This article will review if a loft conversion may increase your council tax and if you should inform your local authority.
How is council tax calculated?
The Valuation Office Agency also known as the VOA give all homes a council tax band. In England, It is based on the value of the home on 1st April 1991. Each band has a different value. All the local authorities have a list of the properties in their geographical area and the valuation band for each of these properties.
The valuation bands are:
Valuation band Range of values
A Up to £40,000
B Over £40,000 and up to £52,000
C Over £52,000 and up to £68,000
D Over £68,000 and up to £88,000
E Over £88,000 and up to £120,000
F Over £120,000 and up to £160,000
G Over £160,000 and up to £320,000
H Over £320,000
Will a loft conversion change your tax band?
When you have a loft conversion, the size and value of the property will increase, and this could put the property into a different tax band.
If the valuation list is changed, the VOA will inform you of this and the local authority will send the tax bill with the corrected price.
On most occasions though, the value does not change until it is sold. In this case, the new property owner will pay the higher band tax.
Do you have to inform the council tax office about your loft conversion?
On completion of your loft conversion, in line with building regulations you will receive a completion certificate. When any building work is completed including loft conversions, a planning and/or building regs notification is sent to the VOA. This will then put a marker on the VOA website telling you that a banding change may take place on sale of the property.You do not need to inform anybody; the VOA will send a letter if your Council Tax band changes.
If you receive this letter and do not agree with it, you have 6 months to make an appeal.
In which circumstance might they change the tax band whilst you still own the property?
The government website states they may revalue your property and put it into a different band if you alter your property to create 2 or more self-contained units, for example an annexe – each unit will have their own tax band.
What is classed as a self-contained unit?
If an area of a building has a kitchen, bathroom (with toilet) and living area, exclusively for the use of the occupier, it is likely defined as a self-contained unit. If the occupier needs to leave the unit to gain access to any one of these amenities, then it’s not self-contained. In this case, instead of increasing your council tax band, you would be due to pay two separate council tax bills!
Depending on what you turn your loft conversion into could affect the council tax. If you have a kitchen and bathroom in there as well as a bedroom, they can charge you additional council tax. If you have a loft conversion (other than the reason above) and as a result, it falls into a different tax band, the council will not charge the higher amount until a new owner purchases the property.
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