§ Mr. Kenneth Carlisleasked the Secretary of State for the Environment what estimate he has made of the likely effect of a domestic rating revaluation based on capital values.
§ Mr. WaldegraveThere are no comprehensive data about the outcome of a capital revaluation of domestic rateable values. However, information about the relationship between house prices and existing rateable values suggests that:
- i. because house prices vary widely between regions, capital value rates would be even less well related to income than they are now;
- ii. the effects of such a valuation would be different for different types of housing. On average, terraced houses would face increases in their rate bills everywhere except the Midlands and the north west; there would be average rises of over 20 per cent. for detached houses in the south of England;
- iii. some individual occupiers would face much larger rises, more than 1 million would have increases of 80 per cent. or more in their rate bills.
Because capital revaluation would not improve local accountability, and because rate bills would remain unrelated to the use made of local services by households of different sizes, the Government have no intention of conducting a revaluation on this basis.
I have placed in the Library more detailed estimates of the likely effects of a capital revaluation.