DIY may boost council tax bills

All homes are in England are being revalued

People who make substantial home improvements - such as loft conversions - may face higher council tax bills.

The government's Valuation Office Agency (VOA) has confirmed that home improvements could push property into higher tax bands during council tax revaluation.

All homes in England are currently being revalued, before new council tax bands are introduced in 2007.

Previously, improvements only affected tax bands when the property was sold.

Catching up

"Home improvements have always ultimately affected the value of a property for council tax purposes when it has been sold," a VOA spokesman told BBC News.

It's absurd for the government to be penalising people for investing in their homes Sarah Teather, Liberal Democrats How council tax revaluation will work

"All that is happening now is that during the revaluation process we shall be catching up with how improvements have increased a property's value.

"We are doing this so that we can fairly gauge the value of the property."

The VOA spokesman added that only substantial improvements were likely to force a property into a higher council tax band.

Small everyday home improvements, such as building a garden shed, were unlikely to increase the value of a property by enough to push it into a higher council tax band, the VOA added.

'Stealth tax'

But the Conservatives said the plan was another example of a government stealth tax.

Shadow Secretary for local government, Caroline Spelman said moving up a council tax band would mean an increase of £270 a year for the average household.

She said: "Hard-working families and pensioners who have spent time and money on renovating their home will be hardest hit.

"Armies of clipboard inspectors will be descending on every town in England to inspect people's homes to justify whacking up their council tax bills."

Inspectors

Liberal Democrat Local Government Spokesman Sarah Teather said: "It's absurd for the government to be penalising people for investing in their homes.

"Council tax revaluation will just prove how unfair it is to base local taxes on the value of someone's home."

"Labour just keeps putting up council tax because they are too scared to do anything meaningful to reform it.

"We need a fair local income tax, based on ability to pay, not a tax on home improvements."

The revaluation process could involve valuation office inspectors entering people's homes to ascertain the value of home improvements, the VOA said.

However, the government agency was keen to deny national newspaper reports that such inspections would be widespread.

"If we don't have enough information then we may write to homeowners to inform them that we wish to make an internal examination. This will happen infrequently.

"The idea that we will have inspectors going into lots of home throughout the land is misleading," the VOA spokesman said.