Arguments over valuation could stall council tax: At least 250,000 people will object to the assessment, writes Paul Gosling

MORE than 250,000 people are expected to appeal against their council tax bandings for the present financial year. By the end of March, 416,000 had questioned their assessments with the Valuation Office, and two thirds of them are likely to lodge formal appeals. Many more are likely to follow suit now bills have been delivered.

Given the superficial nature of the valuations, this is hardly surprising. But what is particularly unfortunate is that some of the regulations causing the confusion will require interpretation by the courts.

With some private valuers paid as little as 25 pence per property, it is perhaps inevitable that significant mistakes were made.

Olga de Corral, an Independent on Sunday reader from Bayswater in London, complained of 'incredible errors in valuations' in the block of flats where she lives: 'Small one-roomed flats in band F with identical flats above and below in bands B and C, then three-roomed flats in band B with identical ones above and below in bands D, E or F'

Band F is for properties worth pounds 120,000 to pounds 160,000 in April 1991, while band B is for properties valued at pounds 40,000 to pounds 52,000.

To Mrs de Corral's dismay, the listing officer of the Valuation Office has failed to respond to informal requests for revaluation, forcing the residents to appeal.

The appeal process itself is likely to cause difficulties where the guiding regulations leave scope for interpretation, particularly regarding properties in bad repair.

For valuation purposes, it is assumed that a property is in reasonable repair, given its age, character and locality. Even though a market valuation would reflect the actual condition, this is not normally taken into account for council tax assessment. An exception is where a property is in substantial disrepair and it would be unreasonable to assume that repairs would be made.

The Department of the Environment, the Institute of Revenue, Rating and Valuation, the Association of District Councils and the National Association of Citizens Advice Bureaux all said they were unsure how bad a defect would have to be to qualify, and that this would need to be resolved in the courts.

Derek Huckle, the Valuation Office's project director for the council tax, agreed that it would ultimately be a matter for the courts but said there were criteria that could be used. 'If a property is incapable of being put into a reasonable state of repair at reasonable cost, then it would be valued as seen. But in determining what is reasonable repair, the age and character of the property have to be taken into account,' he said.

'It may be necessary to look at case law prior to April 1990 under the old domestic rating system. Bearing in mind that it was based on the idea of a market rent for a property, the test was that if it was not economic for a landlord to make a repair then that would lead to a rent reduction, and therefore a lower rate valuation.'

To put it simply, significant subsidence that occurred before April 1993 but was not taken into account for the valuation, would constitute a valid ground for appeal. But dry rot or damp would not be sufficient. However, the dividing line between these two extremes is unclear.

Birmingham Midshires Building Society is operating an advisory service for council tax appeals for pounds 47. Its criterion for substantial disrepair is whether a property is mortgageable. Michael Fitton, the society's chief valuer, said: 'We would ask, 'Is it incapable of being rendered into a reasonable state of repair?' But what that means is guesswork at this stage. It's a difficult one.'

In practice, he said, the grounds for appeal are likely to include: requiring substantial rebuilding; serious subsidence; intrusion of radon gas; use of precast reinforced concrete in construction; asbestos cladding or roofing; and some types of felt roofing.

While property values are based on April 1991 prices, the condition is based on that of April 1993. Rather unfairly, this means that even severe deterioration after this time will not affect valuation until there is a general revaluation - which the Government has ruled out for the foreseeable future. Future improvements will only be taken into account when the property is next sold, and even then April 1991 prices will be used. Local authorities are notifying the Valuation Office of planning applications and building regulations approval requests for entry on to a computer database to register property improvements promptly.

In general, appeals must be lodged during the so-called 'open season', which ends in November. The exceptions are for 'material reductions'. When part of a property is demolished, or when adaptations are made to meet the needs of people with disabilities, a property may be revalued from the date the changes take place, even after November.

Changes to the physical environment of the locality can also lead to a reduced valuation from the date they occur.

Proposals to build a motorway at the bottom of the garden, which would cause the market value to drop like a stone, would not affect the council tax valuation. This would only be reduced once the bulldozers moved in.

(Photograph omitted)