HOMEOWNERS in Welsh property hotspots will face council tax rises of up to 30%, it was predicted last night.
Families in prosperous areas of Wales who have seen the value of their properties rise dramatically in recent years will be the hardest hit.
From today, people throughout Wales will be notified of the new council tax band to which their home has been allocated. Many are likely to be shocked by the implications of the revaluation, the first for 13 years.
Homeowners who have seen their house prices increase, but have not cashed in on the extra value by selling up, will lose out as the property boom bites back. The tax hike is likely to affect families living in desirable areas that have seen above average price increases such as Cardiff, the Vale of Glamorgan and the West Wales coast.
The exact rises will not be known until local authorities announce their decisions in February, but they are expected to be, on average, several hundred pounds for a current band D property for example.
Melvyn Williams, the immediate past president of the National Association of Estate Agents, said, "It sounds as if people who want to have a nice lifestyle with a comfortable house and a nice car are going to be hammered by the Government again. It's scandalous.
"This will hit people not only in places like Cardiff and the Vale of Glamorgan, but right round the coastline up to Gwynedd and Anglesey.
"If it was a straightforward question of reallocating homes to revalued bands, this should be a neutral exercise. The reality is, however, that a way will be found to deliver big increases and people will be hammered."
Daniel Hurford, of the Welsh Local Government Association, said, "Council tax is extremely complicated, but the essence of what will be happening is that those who have seen a higher than average increase in the value of their homes can expect to go up by a band or two. Those whose houses have gone up by an average amount or less are likely to stay in the same band.
"Areas of Wales that will be hit hardest are Cardiff and the coastal belt."
Mr Hurford said one issue that caused great concern was that only a half of pensioners entitled to a discount on their council tax actually claim it. Millions of pounds remain unclaimed every year.
The association is also concerned that council tax payers are propping up the economy, as the contribution of business rates to council funding has decreased from 24% in 1991 to 18% last year. This is a result of a decision by the last Conservative Government to take the setting of business rates out of the hands of local authorities. The drop of 6% is equivalent to an increase of 30% on domestic council tax bills.
Plaid Cymru and the Liberal Democrats said the revaluation showed how there was an urgent need to scrap council tax in favour of local income tax.
Plaid Cymru's Shadow Local Government Minister Dr Dai Lloyd said, "The first thing to note is that Plaid Cymru is totally opposed to the unfair, property-based council tax. We have been calling for a local income tax to fund local government since the Seventies whereby taxes are based on people's ability to pay.
"Property-based taxes like the current council tax are a very crude proxy. We are now finding that some pensioners on low fixed incomes, are living in properties that have seen their valuations go through the roof, and are seeing their council tax increase by between two and three bands.
"Re-banding the council tax is merely tinkering with a manifestly unfair system of tax. The system needs to be changed. How can it be fair that a pensioner on a low pension is taxed exactly the same as a young, high-earning consultant just because they live in similar properties?
"We mustn't forget that this tax was a Conservative response to the hugely unpopular poll tax. It is a shame that the Labour Government has merely followed suit."
Glyn Davies, the Conservative local government spokesman at the National Assembly, said, "I'm very scathing about the call to introduce local income tax. Plaid and the Liberal Democrats are always harping on about it, but they know that no government would ever do it. Putting more on income tax is no longer regarded as politically acceptable. If it did happen, many people would be furious.
"Under the council tax system there has to be a revaluation, but it's vital that the Government deals with the situation truthfully. The suspicion is that they will use this as a means to raise tax unfairly. Some people are likely to find their homes jumping two bands, and coupled with what could be a big rise anyway next year, they could easily end up with a 30% rise next April."
Liberal Democrat local government spokesman Peter Black said, "Council tax is fundamentally an unfair tax, and no amount of tampering with it will change that. You have winners and losers whatever you do."