Council tax 'pays off': More gainers than losers, new report finds

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Indy Politics
TWO-THIRDS of households will face lower local tax bills this year under the new council tax, according to a report by an independent research centre.

The gainers are the poor, people in property bands A to D, and those in households with more than two adults, says the Institute for Fiscal Studies report. The losers are the very well-off, those in higher bands, and single-person households.

Nearly one in five authorities face increases or decreases of more than pounds 100 per dwelling. Bills have increased substantially in Greater London and the South-east, but in the North, North-west, East and West Midlands the local tax bill has gone down.

The researchers looked at what the effect would have been if properties were valued at April 1992 prices, rather than the April 1991 valuations on which the bills are based.

The Government argues that because the property bands are quite wide, any significant changes in house prices can be offset. But the researchers' estimates indicate that 'the impact on regional local tax bills would still have been significant'. Greater London tax bills could have been pounds 20 per dwelling lower based on April 1992 figures. 'If the council tax is to remain credible it will need to . . . allow for significant shifts in relative prices,' the report says. 'The only way it will do so is for there to be regular revaluations of capital values attached to properties.'

Right this Time? An Analysis of the First Year's Council Tax Figures. IFS, 7 Ridgmount St, London WC1E 7AE; pounds 7.50.