How is Council Tax Calculated on New Builds?
Council tax is a tax afforded from each homeowner to the local government, providing funds for the upkeep of public spaces. With this money, the borough can fund projects such as filling potholes, resurfacing roads, managing pests, and collecting bins.
Is new build council tax different to tax paid on older homes?
As with all taxes, council tax is scaled according to the means of the taxpayer. Because of this, the more expensive your home is, the higher your taxes are likely to be. While the age of a home is taken into account when assessing for council tax, your house being a new build should not affect the amount you pay. Instead, homeowners are party to parameters set aside by the council.
How Much is Council Tax on a New Build?
Council tax calculation is a complex process. Guidelines are laid out by the government, but each individual borough will apply them to a different sum. The amount of tax you pay should account for the economy of an area, as well as the style and size of your home. New builds are often more expensive than old homes, which will be reflected in your council tax bill.
Council tax bands for new build
Your council tax band is set depending on the value of your home as of April 1991. While finding an exact figure for a house built 30 years later is impossible, an assessment can be used to estimate the price your property would have sold for in the ‘90s.
| Band | Value as of 1 April 1991 |
| A | Up to £40,000 |
| B | £40,001 to £52,000 |
| C | £52,001 to £68,000 |
| D | £68,001 to £88,000 |
| E | £88,001 to £120,000 |
| F | £120,001 to £160,000 |
| G | £160,001 to £320,000 |
| H | More than £320,000 |
How are new builds assessed for council tax?
To place your home in the correct band, the VOA (the Valuation Office Agency) will assess the property. To allocate the correct band, they’ll take the following aspects into account:
The size of a home
The larger your home is, the higher its value. Your property developer will provide documents such as floor plans and sizing information to the VOA, and they will assess your council tax band accordingly. If you add an extension to your new build in the future, your council tax may be adjusted to match the increase in value.
A house’s layout
The layout of your home can increase or decrease the value of your property. If you have a separate utility room or an open floor plan, for instance, your house may have a higher price point than if it employs closed rooms and a washing machine slot in the kitchen.
The location of the property
The property’s location is one of the most important factors when determining its price. Your property’s proximity to key amenities and transport links may raise the price of its estate, and your council tax band may be higher as a result.
When you move into your home, you may need to contact the local authority to receive a council tax band. The VOA will then get in touch and request documentation in order to carry out their assessment. On rare occasions, there may not be enough information for the VOA to determine the value of your home remotely, but this is very rare when it comes to new builds.
When do you start paying council tax on a new build?
As a buyer, you will start paying council tax from the day you complete on your home. If everything has been set up correctly, the council will be aware of your homeownership when you pick up the keys, and you’ll receive letters informing you of your band and the amount owed for the next year. If you don’t receive any correspondence from the council, you may need to contact them to check that their information is up to date.
New Builds vs Old Homes: Council Tax Bills
Council tax on new builds is much the same as it is on old homes. Old houses can fall into the same bands as new homes, and while the standard price point of your home may push you into a higher band, the same can be said of many second-hand homes.
