Rating (Valuation) Act 1999
| Year | 1999 |
Rating (Valuation) Act 1999
1999 CHAPTER 6
An Act to make provision about valuation for purposes of non-domestic rates in England and Wales.
[26th May 1999]
Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
1 Rateable value.
(1) Schedule 6 to the Local Government Finance Act 1988 (non-domestic rating: valuation) shall be amended as follows.
(2) In paragraph 2(1) (rateable value to be equal to rent under letting from year to year if the tenant bore the cost of repairs etc) for the words from ‘if the tenant’ to the end there shall be substituted ‘on these three assumptions—
(a) the first assumption is that the tenancy begins on the day by reference to which the determination is to be made;
(b) the second assumption is that immediately before the tenancy begins the hereditament is in a state of reasonable repair, but excluding from this assumption any repairs which a reasonable landlord would consider uneconomic;
(c) the third assumption is that the tenant undertakes to pay all usual tenant's rates and taxes and to bear the cost of the repairs and insurance and the other expenses (if any) necessary to maintain the hereditament in a state to command the rent mentioned above.’
(3) After paragraph 2(8) there shall be inserted—
(8A) For the purposes of this paragraph the state of repair of a hereditament at any time relevant for the purposes of a list shall be assumed to be the state of repair in which, under sub-paragraph (1) above, it is assumed to be immediately before the assumed tenancy begins.’
2 Commencement.
(1) Section 1 above shall have effect in relation to rating lists to be compiled on or after the day on which this Act was passed.
(2) Section 1 above shall be treated as having become effective on 1st April 1990 in relation to rating lists compiled before the day on which this Act was passed.
(3) However, subsection (2) above shall not apply in relation to a hereditament if a proposal to alter a rating list in respect of the hereditament—
(a) was made before 12th March 1998 in accordance with regulations under section 55 of the Local Government Finance Act 1988 , and
(b) was not withdrawn or finally disposed of before 11th March 1998.
(4) For the purposes of this section a rating list is a local or central non-domestic rating list.
3 Citation and extent.
(1) This Act may be cited as the Rating (Valuation) Act 1999.
(2) This Act extends to England and Wales only.
EXPLANATORY NOTES
INTRODUCTION
1. These explanatory notes relate to the Rating (Valuation) Act 1999 which received Royal Assent on 26 May 1999. They have been prepared by the Department of the Environment, Transport and the Regions in order to assist the reader in understanding the Act. They do not form part of the Act and have not been endorsed by Parliament.
2. The notes need to be read in conjunction with the Act. They are not, and are not meant to be, a comprehensive description of the Act. So where a section or part of a section does not seem to require any explanation or comment, none is given.
SUMMARY
3. The Act amends the Local Government Finance Act 1988 to require that property in England or Wales which is subject to non-domestic rating is to be valued for that purpose on the assumption that it is in a state of reasonable repair. This assumption will apply whatever the actual condition of the property. There is an exception for repairs which would be uneconomic: in such cases the valuation is to be made on the basis that such repairs will not be made.
4. The Act is designed to put on a statutory footing the law as it was widely believed to apply before the decision of the Lands Tribunal on 11th March 1998 in the case ofBenjamin (VO) v Anston Properties Limited [1998] R.A. 53, [1998] 19 E.G. 163. A similar provision already exists in relation to the valuation of domestic property for council tax (see regulation 6 of the Council Tax (Situation and Valuation of Dwellings) Regulations 1992, S.I. 1992/550).
BACKGROUND
Valuation for non domestic rating
5. The legislative framework for non-domestic rating is set out in Part III of the Local Government Finance Act 1988 (c.41). Property which is subject to non-domestic rating is valued every five years. A valuation is carried out by a valuation officer. He is appointed by the Commissioners of Inland Revenue, and he has a duty to compile and maintain an accurate list of property subject to non-domestic rating (a 'rating list'). There is a local rating list for the area of each local authority to which non-domestic rates are payable. Certain special classes of property are entered on the central rating list for England or the central rating list for Wales, as appropriate. These classes of property consist for the most part of property of the former nationalised industries which extends beyond the boundaries of a single local authority. New rating lists come into force at five year intervals.
6. A rateable value, entered in the appropriate rating list in respect of each property, when multiplied by the national non-domestic rating multiplier specified annually by the Secretary of State, determines the amount of rates payable in respect of that property for each of the five years during which each rating list is in force.
7. The way in which the rateable value is determined is for present purposes virtually the same as that applicable under the previous legislation, the General Rate Act 1967 (c. 9). That Act consolidated legislation dating from 1925 and earlier. Methods and principles established in a considerable body of case law decided in relation to pre-1988 legislation are still considered to be relevant to the estimation of the rateable value for the purposes of the present system of non-domestic rating, though domestic property is no longer taxed in the same way.
The hypothetical tenancy
8. The rateable value is a notional annual rental value attributed to a property on the basis of certain assumptions. The valuer is required to determine the annual amount of rent which, if the property were vacant and available for letting on the open market, it would attract for a tenancy from year to year. The tenancy is a notional, or hypothetical one, not based on the actual characteristics of the landlord or the tenant (if there are a landlord and a tenant) or the terms of any tenancy to which the property may be subject.
9. The physical characteristics of the property, and its surroundings, which are taken into account in the valuation are, for the most part, those which are assumed to be attributable to the property on the day on which the list comes into force or, if there is a subsequent change of circumstances, on a day determined in accordance with regulations made by the Secretary of State.
10. The rental levels to be considered for the purposes of estimating rateable values, whether on the list first coming into force or in relation to its subsequent...
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