Council tax overhaul risks unfair charges for luxury homes, experts warn
The government's use of Automated Valuation Models (AVMs) to set council tax on high-end properties could face challenges, warn experts. This method, currently used for standard homes, may not accurately value unique, high-end properties, making up around 30% of UK homes. AVMs, used by property websites and the VOA for council tax, work well for standard semi-detached and terraced properties, which account for 70% of UK homes. They estimate a property's value using data like location and market trends. However, these models may struggle with unique, high-end properties, potentially leading to inaccurate values and overcharging. Experts, including property specialists and tax advisors, caution against using AVMs for higher-end properties. They argue that these models often overlook individual features, leading to imprecise and frequently excessive tax values. A new council tax levy on these properties could slow down deal-making at the top end of the housing market. Additionally, it could potentially push up prices at the lower end as wealthier buyers target cheaper properties to avoid higher taxes. The government's reliance on AVMs for valuing high-end properties for council tax could face administrative and legal costs due to potential inaccuracies. Experts advise caution in this approach to avoid overcharging and unintended market consequences.
