The Federation of Master Builders has demanded a meeting with housing minister John Healey to complain about local authorities that are levying council tax on homes before they are finished

Brian Berry, director of external affairs at the FMB, said: “At a time when small housebuilders are suffering their worst recession in decades, an extra tax on properties that can’t be sold is the last thing that is needed.”

The FMB has a list of eight councils that it says are abusing the system. It wrote to Healey after his appointment last week to ask for a meeting, and has also raised the issue with the council tax division of the communities department, which said it was looking into the matter.

Roy Billingham, managing director of housebuilder Billingham and Kite, said he was being charged about £300 a month per property. He said: “The local authority, which should be helping us, is kicking us in the teeth. The buildings aren’t complete enough for local building control, or to qualify for a mortgage certificate, but they’re complete enough for the council to take money off us.”

The local authority, which should be helping us, is kicking us in the teeth

Roy Billingham, housebuilder

The National Federation of Builders said it was also concerned by this issue. In April, it called for the introduction of a moratorium on the imposition of council tax on unsold homes.

The eight councils accused by the FMB are North Lincolnshire, North East Lincolnshire, East Lindsey, Norwich, Highland, Gedling, Bromsgrove and Epping Forest. All have differing policies, according to the FMB. Some begin levying the tax when plastering is completed, others levy a 90% charge after 12 months.

The communities department said: “Our officials are arranging a meeting with the FMB, but there are no plans to change the current council tax system.”