The Government has scrapped the valuation of all 22 million homes in England to reset their council tax band. The Scottish government has made a similar decision. So the system will creak along using valuations which were fixed nearly 20 years ago in April 1991. At the time the Government was desperate to replace the hated poll tax and estate agents cruised around their patch valuing property on the fly.

The result is that hundreds of thousands of valuations are wrong. Don’t take my word for it. The present Secretary of State for Local Government, Eric Pickles, estimated in 2008 that “a significant number, maybe as much as 400,000 maybe more, of households are paying the wrong level of council tax, have been paying the wrong level of council tax for a considerable period.”

You can get your banding checked. But – and it is a big but – there are two vital steps to take before you do that. If you do not follow them carefully you could end up paying more.

Step 1: check the band of similar homes in your street. You can do that by putting in your address at www.voa.gov.uk in England www.saa.gov.uk  in Scotland. (In Wales and Northern Ireland valuation has been done more recently and is less likely to be wrong).

If your home is banded the same as or below similar homes then forget it. You do not have a case.

Step 2: check if the band your home is in seems about right. The bands were fixed in April 1991 so you have to work out your home’s value then. You can get an estimate of what your home was worth then by checking its current price at www.nethouseprices.com and then putting that figure into www.nationwide.co.uk/hpi. Pick your region, put in the current price. For Date 1 put 2010 Q2 and for Date 2 put 1991 Q2. When you have got the value in April 1991 check out what band it should be in at http://en.wikipedia.org/wiki/Council_Tax#Current_bands

If the value of your home in 1991 puts it in the right band then, again, forget it. You probably do not have a case.

But if your neighbours are paying less AND it seems that your home was put in too high a band in 1991 then it is worth asking for it to be reviewed. Contact the listing officer in England or the assessor in Scotland – find out your local office at www.voa.gov.uk/where/index.htm or www.saa.gov.uk/saacontacts.php.

The two tests are important because if your home was in too low a band then it will be moved up and you – and possibly your neighbours – will have to pay more tax.

If the band your home is in is reduced then the cut in your council tax – probably between £100 and £200 a year – will be backdated to when you moved in – or 1993 if you moved in before that. If your home is moved up a band the change will only happen for the future.

There is a fuller guide at www.moneysavingexpert.com/council

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