The Council Tax Conundrum: A Battle for Fairness and Justice

The Council Tax System's Shortcomings: An Urgent Call for Reform

Hannah Chowdhry, a law student and property owner, recently sought an annulment of her council tax bill, arguing that her property—constructed with RAAC (Reinforced Autoclaved Aerated Concrete)—should be exempt due to its deteriorated state. Her request was driven by a desire to understand the exemption process and share insights with others facing similar issues, though she is exempt by way of her student status.  The response from the Grampian Assessor & Electoral Registration Office, however, underscores significant flaws in the Council Tax system that demand urgent reform.

The System's Fundamental Issues

The Council Tax banding system, established under The Council Tax (Valuation of Dwellings) (Scotland) Regulations 1992, is based on the capital value of a property as of April 1, 1991. The assumption is that the property was in a "state of reasonable repair" on that date. This rigid approach fails to account for the reality of properties built with inherently flawed materials like RAAC, which pose significant risks and repair challenges.

The Fairer Council Tax consultation has revealed critical gaps in how property conditions are evaluated:

"For many years, a common criticism of Council Tax has been that it is unfair and regressive. This is because when the average Council Tax liability is expressed as a percentage of the estimated property value, the effective tax rate is higher for lower value properties and lower for the higher value properties["

Despite past court rulings, such as those involving properties in 14 Portnalong, Isle of Skye, and 5 Muirkirk Road, Strathaven, which argued properties should be valued as if in reasonable repair regardless of their actual state, the system has not adapted to reflect the true conditions of these buildings.

The Real-World Impact on Homeowners

Hannah Chowdhry’s case highlights the systemic unfairness faced by homeowners. Aberdeen City Council's decision to demolish RAAC-affected buildings due to their unsuitability demonstrates a disconnect between the real state of these properties and the Council Tax banding system. Property owners, often who bought under the Right-to-Buy scheme, now face escalating costs and diminishing property values, despite having invested in what they believed were valuable assets.

The Fairer Council Tax consultation also points out that the current system disproportionately affects homeowners of properties built with substandard materials. These individuals are left to shoulder the financial burden of outdated construction practices while councils benefit from ongoing Council Tax payments and potentially acquire properties through Compulsory Purchase Orders or poorly valued voluntary agreements.

Addressing Systemic Inequities

The consultation’s findings highlight the need for a system that accounts for the true condition of properties and offers fairer treatment to those affected by substandard building materials. The current Council Tax framework punishes homeowners for issues they did not create and fails to provide adequate support or recourse.

The Right-to-Buy scheme, originally designed to broaden access to homeownership, has instead placed many homeowners of RAAC-affected properties in challenging situations. Councils, having sold these properties to unsuspecting buyers, have effectively absolved themselves of responsibility for their long-term upkeep. Consequently, the current system unfairly penalizes homeowners for structural deficiencies that stem from past council construction practices. This has led to a situation where individuals are left to bear the financial burden of issues that originated long before their ownership.

A Call for Reform

Wilson Chowdhry, Chairman of the UK RAAC Campaign Group, said: "The Fairer Council Tax consultation underscores the need for reform to address the real-world implications of property conditions. However, it has failed to recognize the severe challenges faced by homeowners dealing with properties constructed from substandard materials, such as those involved in the RAAC scandal. The Council Tax system must evolve to consider these substandard construction practices and ensure that property valuations and tax banding are adjusted accordingly. Homeowners should not be burdened with the financial consequences of outdated building practices. The system needs to provide the support and fairness that these individuals deserve."

Hannah Chowdhry’s experience is a poignant example of the systemic issues at play and a powerful call to action for policymakers and the public. She said: "It is time to advocate for a fairer, more equitable Council Tax system that addresses these fundamental flaws and supports those who have been let down by inadequate construction practices."

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Text from email to Hannah Chowdhry:

Dear Ms Chowdhry

 I refer to your outstanding proposal against the Council Tax banding of the above property.

Council Tax banding is based on the capital value of the property as at 1 April 1991, subject to a number of statutory assumptions detailed within The Council Tax (Valuation of Dwellings) (Scotland) Regulations 1992.  Regulation 2 (d) states the following assumption:

“that the dwelling was in a state of reasonable repair”

With regard to your property, the discovery of RAAC concrete must be disregarded as this is a condition which is repairable.

A number of cases regarding repairs and property condition have been brought before the Court of Session and I will summarise the decision in the two principal cases below.

The property addressed as  “14 Portnalong, Isle of Skye” was in a dilapidated state.  The owner appealed that it should be excluded from the Council Tax list.  The property was built in the 1920’s with stone gables, corrugated iron walls and an asbestos tiled roof, it had no plumbed in running water, no 13 amp electric supply and no sewage disposal facilities.  The rear wing was totally derelict and the back room had its windows boarded up.  The court decided that all the issues were repairable and that the property should be banded as if it was in a reasonable state of repair.

The second case involves a property at 5 Muirkirk Road, Strathaven.  This was a semi-detached property which had been subject to settlement.  The gable wall was out of plumb, the front and rear walls sloped backwards.  Internally the walls were out of plumb and the floors sloped.  Structural engineers recommended major works to resolve the matter.  An appeal requesting the Council Tax band be reduced due to these factors failed as the property had to be valued as if it were in a reasonable state of repair.

It is my opinion, particularly in light of these previous appeals,  that the discovery RAAC in your property falls under the reasonable state of repair assumption within the legislation and as such the current banding of the property is correct. 

However, should you still disagree with the above, you do have the right to proceed to a formal appeal.  In order to do so, you must appeal against this notice to the First-Tier Tribunal for Scotland within 42 days of the date of this statement.  Details on how to make such an appeal can be found at www.localtaxationchamber.scot.

Kind Regards

Bruce

Bruce Simpson MRICS
Principal Valuer
Assessor & Electoral Registration Office