Splitting Dwellings for Council Tax and Re-valuation

Generally speaking, you expect Council Tax to be assessed on a single dwelling - but what if you split this up?

Generally speaking, you expect Council Tax to be assessed on a single dwelling - but what if you split this up?

The leading case of Corkish v Berg (2019) shed some light on this when the owner-occupier of a house assessed at Band F for Council Tax made a series of improvements to his property over a period of years which had resulted in an increase in the value of the property. However, no change was entered into the Council Tax list. This relied upon regulation 3 of the Council Tax (Alterations of Lists and Appeals) Regulations 2009 which provides that no alteration may be made to the list unless there is a material increase in value and a relevant transaction.

The owner then built an annexe to the main building (which was rented separately) and it was not disputed that this was a separate rateable occupation and therefore a new dwelling within regulation 3. Unsurprisingly the Listing Officer deleted the original entry relating to the original house and replaced this with two separate entries - one for the house and one for the annexe.

So far so good - but the new listing for the main dwelling put it up into Band G (which could not have happened just because of the increase in value as a result of the improvements. The owner appealed the new listing of the main dwelling on the basis that the ‘original single dwelling’ continued to exist and thus regulation 3 prevented any alteration to the list. The Valuation Tribunal agreed and the Listing Office appealed its decision to the High Court.

Unfortunately for the ratepayer, the Judge held that where a dwelling is divided so as to create two dwellings neither of which are the same geographic unit of occupation as the original dwelling then the original dwelling disappears and two new dwellings are created which must then be valued accordingly. So regulation 3 did not in this case prevent the Listing Officer from re-valuing the main house and taking into account the increase in value from the improvements.

So, wherever there is a ‘relevant transaction’ which splits the original dwelling, bear in mind that you could be facing an alteration in your Council Tax Band for the main house, and if you have increased its value by improvements, this will be in an upwards direction.