Daft assumptions of council tax: Many valuations have been made on an artificial basis, writes Gail Counsell

KAFKA would have felt at home with the new council tax, as many householders will have had cause to discover over the past few weeks.

They are the unlucky ones who will have found out that 'son of poll tax' has some habits that are every bit as nasty as its late and unlamented parent.

Most people are aware that the valuations forming the basis for the tax have been conducted as if the inflated property prices of April 1991 still applied. But what few have realised is the entirely artificial basis on which many of the valuations have been made.

Hidden away in the Council Tax (Situation and Valuation of Dwellings) Regulations 1992 are a series of 'assumptions', on which the Inland Revenue, which has overall responsibility for producing the property valuations on which the tax bandings have been based, is supposed to work.

These include such things as:

The property is being sold with vacant possession.

It is in a reasonable state of repair.

If it is a house, it is freehold.

If it is a flat, it has a 99-year lease left to run.

These 'assumptions' are not simply working hypotheses for the Revenue - or the estate agents who have carried out about 60 per cent of the valuations on the Revenue's behalf - which can be overturned by the production of evidence to the contrary, however.

As Kafka, the Austrian writer who wrote so graphically of the bureaucratic frustrations of life, would have appreciated, these 'assumptions' are actually 'myths'. If they are wrong, it will make no difference. That will not form the basis for an appeal against a valuation.

As a result, far from the 'valuations' reflecting the true value of a property, they will in many cases be based on an arbitrary and quite false market value.

The impact can be dramatic. You will not be able to argue that the damp on the bathroom wall or the dry rot in the cellar reduces your liability.

A run-down, semi-slum will attract the same valuation as its expensively renovated neighbour. Equally, a house or flat with 10 or 15 years of its lease left to run will only be worth perhaps 10 per cent of its freehold or 99-year leasehold value.

Yet most leaseholders will be unable to insist their freeholder pays a share of the higher value that attaches to a property by virtue of the fact it has been valued as if it is a freehold. Modern leases usually specify the leaseholder is responsible for all taxes attaching to the property.

Even for those who have been wrongly valued under these daft rules as they stand, the appeal process is a daunting one.

When my council tax bill arrived last week I discovered my two-room property, currently on the market for pounds 129,000, had been placed in the highest tax band - band H, for properties worth more than pounds 320,000.

According to Halifax Building Society, London properties have fallen around 15 per cent since April 1991 (the UK average is about 11 per cent).

Working backwards from the current asking price would have given a value of pounds 151,000 in April 1991, making the property fall comfortably in Band F - for homes worth between pounds 120,000- pounds 160,000.

The valuation was patent nonsense. Despite publicity that valuers would be expected to make an external valuation, this had clearly not been done. (In fact few houses will have been inspected from outside.)

Most of my neighbours' houses are considerably grander than mine, which had clearly been lumped in with them on the basis of nothing more scientific than the name of the road.

Encouragingly the Inland Revenue's head office insisted 'nothing was firm' until 1 April, the date the valuation lists, compiled by the Valuation Office, come into force.

'Until then they are only draft valuation lists and can be rectified,' said a helpful assistant.

But at Huddersfield, which for some unaccountable reason is the place you have to ring if you want to speak to the valuation office for the north London borough of Camden, there was a different view.

The valuation lists had already been printed. 'We could have corrected any errors up till 12 March,' pointed out Huddersfield Man. The fact most councils have (deliberately?) not notified homeowners of their draft bandings until after that date is seen as irrelevant. Homeowners are expected to have trekked off to their local town hall and checked.

For the many who have failed to do so all that is left is to lodge a formal appeal. That could take up to a year to sort out, if estimates that as many as one in 15 householders will challenge their assessments are anything like accurate.

In the meantime, of course, homeowners are obliged to pay the full amount they have been charged. In my case, before any discounts and transitional relief, that means a council tax bill 50 per cent larger than it should be.

Sighing, I asked Huddersfield Man for an appeal form so that

I could set the ball rolling: 'I can't send you that until 1 April,' he said.

Why not, I inquired? 'Because the lists aren't final till then,' he said. Kafka, where are you when we need you?

Seven Points Publications is running a postal advice service on individual liability and valuations under the council tax. Questionnaires, which when returned form the basis of its recommendations, are priced pounds 12.50 from PO Box 119, Chichester, West Sussex, PO18 9LY.

----------------------------------------------------------------- COUNCIL TAX BANDS ----------------------------------------------------------------- Property Value Amount Payable Band April 1991 Camden Wandsworth Chester pounds ,000 pounds pounds pounds A -40 478.35 297.25 404.17 B 40-52 558.09 346.81 471.54 C 52-68 637.81 396.35 538.89 D 68-88 717.54 445.89 606.26 E 88-120 876.99 544.97 740.98 F 120-160 1,036.45 644.07 875.71 G 160-320 1,195.89 743.14 1,010.43 H 320-upwards 1,435.08 897.78 1,212.52 -----------------------------------------------------------------

(Photograph omitted)