Warning: saving energy might push up your Council Tax
By Jayne Warren - 30/01/2007
MPs have warned that the Government’s efforts to encourage households to invest in reducing their carbon dioxide emissions could be undermined by the law of unintended consequences: if improving energy efficiency raises property values, then households may be subject to higher council tax.
The warning is buried deep within a Trade and Industry report published on January 30th.
The all-party Commons Trade and Industry committee report specifically says: "Because local energy installations (such as solar panels and wind turbines) can increase property values, such investments could push homes into higher council tax or stamp duty bands—thus largely, or entirely, offsetting any income benefit from the installation."
This is a bizarre twist in the Government’s drive to encourage us all to “go green” reduce carbon emissions, stop air travel and make our homes “zero-carbon home” by installing energy efficient measures such as wind turbines or solar panels.
And to add to the confusion some local authorities are offering positive council tax incentives. For example, British Gas is currently working with around 40 councils, offering households a £100 rebate on their council tax bills if they invest in home insulation from the company.
So why can't such schemes be extended to local energy?
A spokesman from Create, the-not-for-profit body working with communities and organisations to reduce the effects of climate change and build a sustainable future, told the Mature Times: "This is outrageous. If people are prepared to invest in making their homes more energy efficient, which is exactly what the Government is urging them to do, then they should be rewarded, not penalised."
Cllr Paul Bettison, Chairman of the Local Government Association’s Environment Board, said: “The Government must make sure no financial deterrent, including any possible future council tax revaluation, penalises residents who invest in energy efficiency home improvements.
“Councils are on the frontline in the fight against climate change. The Local Government Association has set up the Climate Change Commission to look at the actions councils can take to cut emissions in their own buildings, service delivery and in leading action with people in their local area.
“The Commission will build on the work of exemplar councils such as Shropshire which is working with local communities to help cut their emissions by 60%. It will make recommendations to local and national government on how to raise all authorities to the level of the best.”
According to The Trade and Industry Report fact that the number of households choosing to adopt local energy technologies was very low not just because of the lack of financial incentive, but also "because individuals face a number of hurdles when it comes to the purchase, installation and operation of local energy systems. As one witness put it, for households to overcome these barriers they are 'likely to require the entire skill set found in a specialist renewable project development company'".
The committee is recommending that any increases in property value due
to energy efficiency measures, or local energy installations, should not be considered for purposes of re-assessing homes for council tax – although this poses the possibility of additional bureaucracy and endless wrangling.
Surely just the thought of paying more council tax is enough to make all but the fiercest eco-warrior stop the turbines.