Council tax payments are applicable to all residents of rented and owned properties. Through this blog post, we aim to learn when one starts paying council tax on a property which is a new build. We will also explore how council tax is calculated on new build properties, how completion dates are estimated and the duration of council tax bills in a calendar year.  

When Do You Start Paying Council Tax On A New Build?

You start paying council tax on a new build once the property is considered to be “complete” and thus is considered by local council authorities entered into the valuation list. 

When there is construction work going on a new build, council officials visit the premises to assess the nature of the work being carried out. It is during these visits that often photographs of the work in progress are also taken. On the basis of these periodic visits to the site and in discussion with the builder /owner of the proprty, council officials are able to assess the estimated date by which the new build will be complete.

However, it is only when the property is structurally complete that the council authorities issue a “completion notice” indicating that the remaining work on the new build is expected to be completed within the next three months. This notice mentions the completion date; which then serves as the basis for payment of council tax by the proprty owner.

Council tax for a new build is based on the market value of the property and the valuation band assigned to it by the local council. The owner or builder must inform the local council of the value of the property; who will then request the Valuation Office Agency to assess the market value of the property according to its worth in 1991 (this is a uniform practice across the UK) to assign them a valuation band. 

While the valuation process takes its due time, the local council authorities assign a council tax number to the owners. 

However, it is the responsibility of the property owner to inform the local council office so that they can start paying council tax on a new build. Otherwise, if they deliberately withhold or delay such information, they may have to pay a backdated amount of the council tax in a lump sum. 

As a property owner, you will be required to share the following information with the council authorities:

  • Complete address of the property 
  • Full name of the property owner
  • The exact date when the work was completed
  • Purchase/ completion date or start date of tenancy
  • Name and contact details of the developer

How Is Council Tax Calculated On A New Build?

When it comes to the calculation of the amount of council tax due on a new build, the same rule applies with regard to the assignment of a valuation band by council authorities.

There are eight valuation bands for council tax bills that run across A to H, with Band A assigned to properties with the lowest value and increasing up to Band H for properties with higher values. It is on the basis of this assigned band, that the amount of council tax is decided. Therefore, the higher the valuation band, the higher the council tax payments.

Below is a detailed classification of council tax rates according to their valuation bands:

Council Tax BandProperty Value
AUp to £40,000
BOver £44,000 and up to £52,000
COver £52,000 and up to £68,000
DOver £68,000 and up to £88,000
EOver £88,000 and up to £120,000
FOver £120,000 and up to £160,000
GOver £160,000 and up to £320,000
HOver £320,000 

In addition to a property’s value, the Valuation Office Agency considers the following factors when assessing a property for valuation purposes:

  • location
  • size
  • character
  • layout
  • purpose or use

How Is The Completion Date Decided On A New Build?

Even though the completion date is an estimated three months starting from when a new build is structurally ready, council authorities make sure that their estimate is as practical and realistic as possible. For this purpose, they take frequent photographs during their visit to the site and have short discussions regarding the building and construction updates with the builder or property owner.

Therefore, if the following criteria is met, a property will be considered as substantially complete and a closer to reality estimated date of completion can be decided upon:

  • all external walls and roof of the property are in place
  • basic utility services such as gas, water, and electricity are laid on to the site
  • the floors are laid out 
  • the internal walls are built 

When Does Council Tax Run From?

Council Tax bills are payable from the start of the financial year in April with 10 monthly instalments concluding in January. While councils maintain February and March as tax-free months to collect payments that were not made in time; those liable to pay council tax bills may request their local council for 12-month instalments to make payments convenient by reducing the amount of each instalment.

Essentially, your council tax bills indicate the following three areas:

  • the total amount due for the entire year
  • how the annual amount has been worked out by the local authorities
  • the dates are payments will be due

A standard bill is spread over 10 monthly instalments that run between April and January. However, if residents find it difficult to make timely amounts as per the monthly amount that is due, they can request their local council to divide this annual tax into 12 instalments; thus, reducing the size of the monthly instalment.

It must be remembered that you may not receive the same amount of council tax bill as another person living in your council. This is a property-based tax that varies depending upon the value of the property. 

Also, each council designs their council tax scheme. This means that your bill may be different as compared to another individual living in a different council. 

Conclusion:

The above discussion makes it quite clear that council tax on a new build is applicable from the date of completion. It is the property owner’s responsibility to make timely payments of their Council Tax. There will be no exemption from council tax payments if the property is to be rented out and remains unoccupied until the tenants move in.  

FAQs: When Do You Start Paying Council Tax On A New Build?

Do I pay Council Tax on an empty property?

Yes, you have to pay Council Tax on an empty property; although your local council may grant you a discount on the total bill. However, if a property has been empty for 2 years or more, a council tax premium will apply to the annual bill.

What months don’t you pay Council Tax in the UK?

You don’t pay council tax in the months of February and March in the UK. Council tax payments are spread over 10 monthly instalments with these two months being a council tax holiday for residents.

Who is exempt from paying Council Tax in the UK?

Individuals exempt from paying Council Tax in the UK include the following:

  • full-time students 
  • student nurses 
  • apprentices and youth training trainees 
  • people caring for someone with a disability 
  • patients living in hospitals or care homes 
  • people living in certain hostels or night shelters
  • people with severe mental impairment.

What’s the highest Council Tax band?

There are eight valuation bands for council tax bills that run across A to H, with Band A assigned to properties with the lowest value and increasing up to Band H for properties with higher values. It is on the basis of this assigned band, that the amount of council tax is decided. 

How is council tax paid?

Council tax is paid through 10 monthly instalments every year. If you pay via a direct debit facility, you can do so between the 1st, 8th, 15th or 22nd of each month. You can also pay council tax bills through online transfer, debit or credit card or a cheque.

How do I avoid council tax in the UK?

You cannot avoid council tax in the UK as it is a mandatory payment made to local councils. However, should you be eligible for a council tax reduction due to certain circumstances, you can apply for a discount at your local council office.

References:

Register new build and converted properties for Council Tax

When Do You Start Paying Council Tax After Buying A House | August 2022

Council Tax: new properties and completion notices | West Northamptonshire Council – Northampton Area

Council Tax After Buying A House | First Time Buyer Help

Start paying Council Tax – GOV.UK

Council Tax banding and new build properties

Council tax for new builds

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