A MAJOR national overhaul of the council tax could land York householders with bigger bills, a senior city politician has warned.

The Government is valuing England's 30 million properties so council tax can be re-banded.

Current council tax bands are based on 1991 property prices, while the new bands will represent house values as they stood yesterday - the first day of next financial year.

A spokesman for the Office of the Deputy Prime Minster (ODPM) spokesman said homes which had risen in value beyond the national average increases since 1991 would be likely to move up a council tax band. Homes which have dropped below the average would drop a band.

He said: "The purpose of this is not to make any more money from council tax. It (the council tax system) is very out of date - it needs to be updated."

But in Wales, where homes have already been re-valued, more than one third of homes have moved into higher tax bands, with bills rising by as much as 22 per cent, the Liberal Democrats announced this week.

City of York Council leader Council Steve Galloway warned some York householders could face similar tax hikes when the new bands are announced next year, with property values in parts of the city soaring way above national house price rises over the last 15 years.

"We are certainly very anxious," said the Liberal Democrat. "It will disproportionately affect some people in York. In certain streets, house prices have certainly gone up more than the national average."

The Liberal Democrats want to scrap council tax and replace it with a form of income tax - which they have said would be a fairer system.

York MP Hugh Bayley said he would like to see the council tax system changed to make it more flexible. He said: "We'll have to wait and see what the re-evaluation of houses is to see the impact in York."

Peter Moody, partner of Hudson Moody, said Victorian properties in York had seen some of the biggest value increases. He said: "It wouldn't surprise me at all if property prices had risen more than the national average in York, so I think it will affect people. I'll be surprised if people don't end up paying more. The 1991 valuation was very inaccurate anyway."

The new council tax bands will be announced in autumn 2006, with the new bills appearing the following year.

Updated: 10:12 Saturday, April 02, 2005