Meeting: 05/11 (FG&G) Agenda Item: FG020/18 a) Date of Report: 01/11/18 Correspondence received re challenge to Car Park business rates valuation. GOV.UK Initial response to your Challenge Owner/occupier: Melbourn Parish Council Agent: N/A Reference number: CHG100010212 Property: ADJ 35, HIGH STREET, MELBOURN, ROYSTON, HERTS, SG8 6DZ Rateable value: 24,000 with effect from 21 April 2017 Challenge submission date: 30 November 2017 We have reviewed the Challenge form and evidence you submitted, and we have summarised our initial response to the issues raised. Summary of conclusions We have reviewed the evidence that has been submitted with your Challenge case regarding the rateable value for your property and we are satisfied that the rateable value attributed to your property is not unreasonable based on the information available. Rental evidence In your submission you have declared that there is no rent passing on the subject property. You have not provided any other rental evidence to justify you proposed valuation. The assessment evidence you have referred to do not suggest your rateable value is excessive. Page 1 of 7
Other Information Attached is other relevant information related to our conclusions. The grounds and particulars In your Challenge form, pg.2, you have selected the following grounds for your Challenge: 1/ 'The rateable value shown in the rating list on or after 1 April 2017 is wrong' Under the subject grounds, and in consideration of the evidence you have provided with your submission, we have reviewed you rateable value, and all aspects of your current rating valuation, as set at the compilation of the 2017 Rating List with Antecedent Valuation Date (AVD) 01 April 2015. The wider context regarding valuation The rateable value is an estimate of the yearly rent the property (in this case car park) might reasonably be expected to let for at a particular date on the open market, subject to certain standard lease assumptions. The 2017 revaluation came into effect on 01 April 2017, and the rateable values are based on market values at 01 April 2015. When assessing the rateable value of a property we are required to apply the statutory definition which is set down in Paragraph 2(1) of Schedule 6 of the Local Government Finance Act 1988 as amended by section 1(2) of The Rating (Valuation) Act 1999. Rateable Value is defined to be an amount equal to the rent at which it is estimated the hereditament might reasonably be expected to let from year to year on the assumption that: (a) the tenancy begins on the day by reference to which the determination is to be made; (b) 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; and (c) the tenant undertakes to pay all usual tenants rates and taxes and to bear the cost of repairs and insurance and the other expenses (if any) necessary to maintain the hereditament in a state to command that rent mentioned above. In order for the Valuation Office to complete revaluation, we collect evidence of actual market rents from around the valuation date and carry out analysis to form a picture of the level of rents being paid in an area for different types of property. The analysis is on the basis of a value per car parking space. We use the results of this Page 2 of 7
analysis to calculate rateable values. We take into account factors such as size, location, layout, access, facilities, condition and any special features of the premises. Thus, your rateable value has not been derived based on whether you generate revenue from the property. Neither it has been derived by applying an inflation, or any other, percentage rate. It is derived only from analysis of relevant evidence from the open market, using the comparison method of valuation. Having in mind that your rateable value represents the estimate of the yearly rent that the property is expected to achieve on the open market at a certain valuation date, and as there is no rent passing on the subject property, in assessing your rateable value we have compared your property with other similar properties in the subject locality or in similar localities. The value of 280/space adopted in your valuation, is based on actual rental evidence, where lease agreements have been taken near the antecedent valuation date (AVD), 01 April 2015. For example, the same basis 280 per car parking space has been adopted in the 2017 list valuation for similar car parks: 1/ R/O 42-54, WOOLLARDS LANE, GREAT SHELFORD, CAMBRIDGE, CB22 5LZ valued on basis 280 per parking space This car park consists of 42 standard car parking spaces and 3 disabled car parking spaces. As it accommodates for lesser number of car parking spaces, respectively it has smaller total RV. However, the basis of valuation are the same as the subject challenge property. 2/ CAR PARK, CLAYHITHE ROAD, WATERBEACH, CAMBRIDGE, CB25 9HZ valued on basis 280 per parking space This car park consists of 64 car parking spaces, and as larger in size respectively has greater total RV. We will point out, that it is incorrect approach to just compare total RV values. Different properties vary in size, location, layout, quality, therefore it will be reasoned that properties of different size will attract different rental bids and respectively will be attributed different rateable values, appropriate for their size and other physical features. The actual physical characteristics of each property are taken into consideration, or example: * size: larger car parks with greater number of car parking spaces will respective have greater RV compared to smaller sites. * location: some locations are more valuable compared to other, hence will attract higher demand and respectively higher rental values, and respectively higher values per parking space. For example: CAR PARK, ELM WAY, PAPWORTH EVERARD, CAMBRIDGE, CB23 3RY Page 3 of 7
and CAR PARK, STIRLING WAY, PAPWORTH EVERARD, CAMBRIDGE, CB3 8GA are both valued at 500 per parking space. The above is derived from open market rental evidence. The relevant case low is: Lotus & Delta v Cilverwell (VO) & Leicester City Council (1976) The evidence and relevance to the subject property You have proposed a revised valuation figure of 11,400 but you have not justified how you have arrived at your valuation. Therefore, we are unable to provide a feed back to your valuation figure. In your submission you have made a reference to the improvements made to the subject car park i.e. increased number of disabled spaces and CCTV, which are made for the benefit of the car park users. * Provision of free parking for disabled badge users is a policy decision rather than a legal requirement. Thus disabled parking spaces fall to be included in the valuation. Such spaces, as they require greater area of space, are normally valued at 20% uplift. Currently, there are no disabled car parking spaces reflected in your rating valuation. Should there be some disabled spaces within the subject challenge property, and subject to further investigations, the existence of such disabled spaces is likely to result in an increase of RV. * Under rating, any tenant's improvements, are rateable for tax purposes (despite usually not reflected in the rent agreed). For tax purposes, we are required to value the property as if vacant to let or rebus sic stantibus at the valuation date. Therefore, we value the property in its physical state (and including any improvements made by the tenant) as it existed at the valuation date, for the current rating list 01 April 2017, regardless of whether the business operating from the premises is profitable or not. In early 2017, the improvements made to the subject challenge property were reported to us for the purposes of reviewing your valuation. At this point it came to light that extra car parking spaces were added to your hereditament, hence the increase in rateable value from date of schedule 21 April 2017. The increase in your rateable value is only reflective the greater number of car parking spaces, the basis of valuation have reminded as before the improvements were made. You have provided a list of 44 rating assessments with your challenge submission. Page 4 of 7
This list includes: shops, offices, warehouses, restaurants, surgeries, clubs, pavilion, hall tennis court, public houses, banks hand car wash etc. All of the above are different types of properties, which are valued on different valuation basis and thus not comparable in respect of your rateable value. For the purposes of rating valuation, comparison must be made only 'like for like'. The valuation basis and considerations vary greatly for different types of properties. Most of the hereditaments on your list are not comparable properties and are valued on different basis. Also, we will point out that your list with comparable assessments is out of date and does not reflect the current 2017 rateable values of the properties listed. Therefore, any of the RV shown on your list, are not relevant comparable rateable values for the 2017 rating list. However, you have made a reference to the valuation of other car parks in the villages of Sawston and Great Shelford, but you have not highlighted which are the relevant assessments you referred to, neither how you have provided any comments on how you have compared these with your assessment. In order to process you case, we have assumed you referred to following assessments: 1/ R/O 42-54, WOOLLARDS LANE, GREAT SHELFORD, CAMBRIDGE, CB22 5LZ This car park was valued exactly on the same basis as the subject challenge assessment. It had RV 10,000 valued at 235 per parking space basis in the 2010 list and its current RV in the 2017 list is 11,750 valued on basis 280 per parking space. This car park consists of 42 car parking spaces and 3 disabled car parking spaces, and as it contains lesser number of car parking spaces, respectively has smaller total RV. In terms of location, layout, access, facilities and condition it is not considered superior compared to your property. Further there is a rent passing on this property, agreed in 2012, which is greater compared to the current RV, thus based on comparison with this car park, it could be concluded that your RV is not excessive. We have been unable to locate any other cap parking assessments in your list of rateable assessments. Thus, we have assumed, that in your submission you made a reference to: 2/ 27, HIGH STREET, SAWSTON, CAMBRIDGE, CB22 3BG this property however has been reconstituted in the 2000 list and we believe is now part of an assessment known as VINDIS & SONS, 27, HIGH STREET, SAWSTON, CAMBRIDGE, CB22 3BG. Further, VINDIS & SONS, 27, HIGH STREET, SAWSTON, CAMBRIDGE, CB22 3BG, is a Car showroom and premises, which has completely different valuation Page 5 of 7
basis, where any car parking spaces are valued under 'other additions' and as part of another hereditament. The analysis of rental evidence and the values applicable to such parking spaces is based on a completely different analysis. We suppose, you must have noticed the presence of vehicle display spaces in the above assessment where display car parking spaces are valued between 250 and 350 per space, depending on their physical attributes. The presence of other car parking spaces is ancillary to the main accommodation Car Showroom, therefore not comparable to car parks open for the use of general public and forming a separate hereditament for rating purposes. As for the assessment known as: HAND CAR WASH REAR OF 31, HIGH STREET, SAWSTON, CAMBRIDGE, CB22 3BG is also a different type of property valued on a completely different valuation scheme specifically for HAND CAR WASHES IN CAMBRIDGESHIRE BA's. There are no car parking spaces as such reflected in the valuation. Thus, we are unable to compare your property with a car wash facilities. As explained above, the valuation method adopted for the valuation of car parks countrywide is the rental method of valuation and is based on analysis of rental evidence for the subject type properties in the same or similar localities. Comparison have been made on basis 'like for like'. You have not provided any rental or assessment comparable evidence that suggests our valuation is incorrect, therefore based on the information available to our knowledge we are unable to alter the 2017 rating list. Please, also note that the previous 2010 revaluation was based on rental evidence at the 1 April 2008 so some 7 years prior to the valuation date of the 1 April 2010. Summary and conclusion We have reviewed all evidence available to our knowledge in respect of your rating valuation. Having taken into consideration all physical factors and having compared your property with other similar assessments, we are convinced that the rateable value attributed to your property, as set at 24,000 with effect from 21/04/2017 is not unreasonable. What you need to do Review our comments and the evidence provided. If you want to provide further comment and evidence, which relate to the grounds of your Challenge, reply to this message by 19 November 2018. Page 6 of 7
You can reply to: ccaservice@voa.gsi.gov.uk; or Check & Challenge Service PO Box1827 SHIRLEY SO15 9HH MELBOURN PARISH COUNCIL At this stage in the process we are unable to accept any new evidence, unless: it is in response to our evidence; it is in response to billing authority evidence; or you are able to demonstrate that it relates to the grounds of your Challenge and could not reasonably have been known to you at the time you submitted your Challenge. If you agree with our view of the Challenge, you should complete and return the attached withdrawal form. If you ve appointed someone to act for you, a copy of this correspondence has been sent to them and you don t need to do anything, this is just for your information. What happens next If we don't receive a reply by the date specified, we will continue processing the challenge. If you are unable to respond by this date, contact us as early as possible to request more time to respond. You can find more information on the Check and Challenge service by searching for Page 7 of 7