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How the council tax band works

Tax bands are groupings in which properties are assigned for taxing purposes. Each tax band is a range of values that represent house prices as they were in the open market on 1st April 1991. All these houses must be domestic houses and not business premises. The grouping of houses is done by the Valuation Office Agency (VOA). These values are used by the Council Tax bands to determine the tax that is chargeable on a property. There are eight groups in the council tax band of England. Each group is assigned a letter from A to H.

Valuation Office Agency

The Valuation Office Agency is in charge of grouping properties into the different tax band. They do this when asked or during council tax challenge. The VOA also assesses properties that are made bigger or smaller, as well as those properties that are newly built. Newly constructed properties, regardless of when they are built, are subjected to the same tax groupings as those proposed in 1991. Other than the 1991 real estate market values, properties are also assigned different values depending on their location, layout, character, change in use and location.

Council Tax Band for HMO

Houses in multiple occupation (HMO) may or may not be treated as other houses. If an HMO house has individual units with every unit having its own originally built facilities, then it will be addressed as a single occupation and banded differently from other units in the property. HMOs that have been modified are treated entirely differently. If an HMO was originally designed to house many people but later modified to have separate units, it may be treated differently. It will be considered as a single living quarter when occupants share social facilities such as kitchens and bathrooms. HMOs that were banded as a single unit but now have kitchenettes, small toilets and bathroom facilities are also still grouped in one band.

Some principles of council tax bands for HMOs apply for home annexes. Annexes are living quarters that are attached to property. If one original house has been modified to have fully furnished living quarters, the new house can be grouped into two different bands. The decision to group it in two bands is made by considering how the annexe looks like and how it is used. If the annexe has the physical characteristics of a full house, the new property will be in two bands.

The new house will be in one band if the annexe is only used as a basic living quarter. That is to say that it is not how the annexe is used that determines the band it will be placed in but the kind of physical facilities that it has. If it has a fully furnished kitchen, toilet, bathroom and a living room, it will be assigned a band separate from the original house. If the facilities are only used for convenience, it will be considered part of the original house. Annexes are usually constructed to accommodate a growing family or when a relative comes to visit. 

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