Justine McGuinness today continued her campaign to axe the unfair Council Tax, following Liberal Democrats warning that Council Tax payers in West Dorset face a tax bombshell. West Dorset Liberal Democrat Justine McGuinness said:

“Council Tax is unfair, and revaluation isn’t going to solve the problem - it’s going to make it worse. Local people should not have to struggle to find hundreds of pounds extra in Council Tax just because house prices have risen in West Dorset.

“It will be particularly unfair on West Dorset families because wages here are below national average.

“Both the other parties try and deny it, but they simply have no solutions to the ticking time-bomb of spiralling Council Tax bills. The biggest post-election tax rises will come from the Labour and Tory-backed plans for rebanding.

“The whole Council Tax system is bust, and it is time to scrap it. The Liberal Democrats and I will work to replace it with a fair tax system that will cut the typical family’s bill by around £450 a year.”

Council tax is currently based on April 1991 property values but the government is updating its valuation figures to take account of changes in property prices since then. Anyone whose home has gone up more than the national average since 1991 will be moved into a higher tax band. That means bills will rise by up to 22%. In Dorset house prices have risen nearly 50% faster than the national average.

Property prices TODAY will be the basis for Council Tax bills for the next 10 years.

West Dorset will be hard hit because house prices have gone up 219%, according to the latest research from the Halifax House Price Index. Homes could move up two, three or even more bands.

In Wales, where revaluation has already happened, some families will see their council tax bill TREBLE. That could be repeated in West Dorset.

Notes to Editors:

1. Current council tax bills are based on property value 1 April 1991. Council tax bills from April 2007 will be based on property value 1 April 2005

2. Areas where house prices have risen faster than the national average (175%) are likely to have homes moved into higher tax bands.

3. Labour and Conservatives are committed to revaluation.
Caroline Spelman, Conservative local government spokesman: ‘Of course we understand that a property-based tax has to take account of changes in the value of property. (Hansard, 2 March, col. 992)

4. In Wales, where revaluation has happened, 33% of homes were moved into higher bands, 8% of homes moved down a band. 3 homes were moved up 8 bands, trebling their council tax bill.