MARTIN Lewis has urged households to check an essential bill to see if they could save thousands of pounds.
Local councils have been given the green light in to raise council tax by as much as 5%.
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Any rises will come into effect from April.
But nearly half a million households are thought to be in the wrong council tax band.
And if you’re one of them it means you are paying more for your bill than you need to.
It’s all down to rates being set according to property values in 1991, and prices have changed a lot since then.
Writing on the Money Saving Expert website, Martin Lewis said its “well worth asking” what council tax band you’re in.
If it turns out you’re in the wrong band, you could save thousands of pounds on your council tax bill.
You could even get the lower bill backdated meaning you get some cash back too.
But anyone who goes ahead with asking for an official assessment of their council tax band should be warned they could end up paying more.
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This is because you can’t ask for your band to be lowered, instead you have to get it assessed – which means it could go up.
The council could decide you are in a council tax band that means your bill is higher, so check carefully before challenging your council tax band.
Government figures from last year show that almost one in three (31%) people who challenged their band last year got a council tax reduction.
The majority of people (61%) stayed in the same band, but a lucky 11,687 ended up having to pay less council tax.
Just 0.1% of people saw their council tax bills go up as a result of a review – or 40 households in total.
How to check if your council tax band is wrong
First, you need to find out what council tax band you are in.
You can find out your council tax band by checking with your local authority or on the postcode checker.
There are two checks you need to make before challenging your council tax band – the neighbour test and the valuation test, according to MSE.
The neighbour test
The first is checking what your neighbours are paying.
You can check this really simply on either the Valuation Office Agency (VOA) or the Scottish Assessors Association (SAA) in Scotland.
You want to look at properties that are of similar size and value to yours.
If all your neighbours are paying less than you, this could be a good indicator that you’re in the wrong band and overpaying.
But be warned, the government could decide that actually your band is right and they’re all underpaying.
You won’t have to pay any extra, but your street could be stuck with higher bills which could sour relations.
If you are paying less than your neighbours then an assessment is riskier and you could be stuck with a higher bill.
The valuation test
The second check thing is what your house was worth in 1991, to see if it was put in the correct band.
To do this, you’ll need to start with a more current valuation. If you bought your house after 1991 you can start with the date and price you paid, but otherwise you need to dig deeper.
You can often see previous sale prices on property websites such as Zoopla and Rightmove.
If you rent, or you bought before 1991, use these sites to find the earliest sale price you can and make a note of the date and price paid.
Next, check neighbouring properties to make sure that your house wasn’t an outlier.
Once you have your valuation, you can use MoneySavingExpert’s clever calculator to estimate what the price would have been back in 1991.
If the price is lower than the band you’re in, this suggests you may have a good case for a re-evaluation.
If the price is higher then asking to challenge your band could well end in higher bills and isn’t worth the risk.
Money Saving Expert says that if your house passes both the neighbour test and the valuation test it’s worth challenging.
If you just pass the neighbour test – you could still challenge and you probably won’t end up with higher bills either way but your neighbours could end up paying more.
If you fail both the tests then a challenge is a very risky move and you probably shouldn’t consider it.
MSE also warns that even passing both the tests doesn’t guarantee that you’ll get a reduction.
How to challenge your council tax bill
If you decide to go ahead with a challenge, contact the Valuation Office Agency (VOA) in England and Wales or the Scottish Assessors Association (SAA) in Scotland to do this.
Make sure you’ve got the evidence to hand showing you’re paying more – this could be having addresses of similar properties to yours in a lower band, for example.
If the VOA agrees that your property is in the wrong band, it will contact you to let you know your band will be changed.
This can take up to two months for the VOA to review your case – so you might be in for a long wait.
But while you could get moved to a lower band and pay less, there’s also the chance the VOA could find you’re not paying enough.
This could mean you’re moved to a higher band.
In some cases, entire streets have been rebanded upwards – which won’t make you popular with the neighbours.
If you disagree with the VOA’s ruling, you can appeal your case – but only if you’ve been told that you can when you get the decision.
You must appeal within three months of your decision – to do this, get in touch with the Valuation Tribunal Service.
If the Valuation Tribunal agrees with you, it will get the VOA to change your band – and your bill will change.
If you’re moved to a lower band, you’ll get a refund of council tax going back to the date you moved into the property.
But if you’re moved to a higher band, you’ll start paying an increased rate of council tax straight away.
Here, we have listed all the locations where council tax will rise by up to 15% and we explain how much more you will pay.
Plus, thousands of households set to have council tax bill frozen – check if you’re one of them.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
