GVA Grimley - "Legislation On Valuations For Non-Domestic Rating Purposes To Be Clarified"

Date: 03 Aug 1998

Government Statement This Week.

Denise Trollope, Gva Grimley, International Property Advisers Comments:

In a surprise announcement this week, the Government publicised its intention to change the basis of Rateable Value.

Since 1 April 1990 rating assessments have been based on the rental value of the property assuming a number of different factors. One of these is that the 'hypothetical tenant' is responsible for all repairs to the property.

'Any,significant repairrequired to a property is therefore reflected in a lower rateable value because the hypothetical tenant would reduce his rental bid for the promises, says Denise Trollope, Rating Partner at GVA Grirmley.

This widely held view was upheld in March 1998 when the Lands

Tribunal gave its decision in the case 'Benjamin v Anston Properties'.

Five months later the Government has decided to 'move the goal posts' by announcing that properties should be valued assuming they are in a reasonable state of repair irrespective of their actual condition.

"This seems to fly in the face of other rating assumptions and is yet another example of the Government tinkering with the legislation, says Denise Trollope. "in my view this change is completely unnecessary and prejudices ratepayers who occupy properties in poor repair. If anything, the Government could see more litigation because the change in the valuation basis will lend to more argument over the question of what constitutes 'repair'."

Not only is the basis of valuation changing but it will also be backdated to 1 April 1990. This means that legitimate rating appeals lodged following the Lands Tribunal Decision will have no effect and the ratepayer loses out once again!

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