Fibre Optic Networks (Non Domestic Valuation practice notes)

These Practice Notes were developed for the purpose of revaluing non domestic property in Northern Ireland as part of Reval2023. They were produced primarily as guidance for LPS Valuers to ensure, amongst other things, consistency of approach and practice in rating valuations.

Scope

The scope of this Practice Note is solely to ensure a consistent valuation approach for this property Class/Sub Class/Type for Non-Domestic Revaluation 2023 and subsequent entry in the new Valuation List which becomes effective on 1^st April 2023.

The basis of valuation for new entries in the Valuation List, or Rating Revision cases after 1^st April 2023, is Schedule 12 (2)(1) of the Rates (NI) Order 1977.

Description

This Practice Note refers to property classified as:

Class: Utilities
Sub class: Telecoms
Type: Cumulo Basis

This Practice Note does not apply to all telecoms networks, just to fibre optic networks as set out in the Valuation (Telecommunications, Natural Gas and Water) Regulations (Northern Ireland) 2010.

Legislative Background

Schedule 12 Part 1 Paragraph 1 of the Rates (NI) Order 1977 applies.

“Subject to the provisions of this Order, the Net Annual Value of a hereditament shall be the rent for which, one year with another, the hereditament might, in its actual state, be reasonably expected to let from year to year, the probable average annual costs of repairs, insurance and other expenses (if any) necessary to maintain the hereditament in its actual state, and all rates, taxes or public charges (if any), being paid by the tenant”.

As with other network utilities there is provision in the telecoms regulations to value what would otherwise be many hereditaments as one: -

(2) Where a company which is mentioned in Part 1 of the Schedule (“the designated person”) occupies, or if it is unoccupied, owns any hereditament which comprises posts, wires, fibres, cables, ducts, telephone kiosks, masts, towers, switching equipment, or other equipment, or easements or wayleaves, being property used for the monitoring, processing or transmission of communications or other signals for the provision of electronic communications services and which would, apart from these Regulations, be more than one hereditament, those hereditaments shall be treated as one hereditament.

(Valuation (Telecommunications, Natural Gas and Water) Regulations (Northern Ireland) 2010)

Network Operators are named in the Valuation (Telecommunications, Natural Gas and Water) (Amendment) Regulations (Northern Ireland) 2014 which came into effect on 1st April 2014.

Valuation approach for 2023

The recommended valuation approach for Reval2023 is to retain a comparative rentals basis for the fibre and buildings, with additions for rateable Plant & Machinery. The cumulo valuations are apportioned based on fibre length per council district.

Fibre is valued at an £/amount per route in km, depending on the total length of the network and the number of lit fibres. The scale of fibre values per route km is available on request.

All operational buildings occupied with fibre optic networks are valued in line with local rental levels for similar premises reflecting any rateable tenant’s improvements.

Radio sites are valued in accordance with other Telecommunications masts in the list and added to the cumulo. Rateable Plant and Machinery is valued in accordance with the 2023 Rating Cost Guide and de-capitalised at the prescribed statutory rate.

Rent and lease questionnaires

For this class of property Rent and Lease Questionnaires (RALQs) were not issued.

Contacts

For advice on any aspect of this Practice Note contact LPS on 0300 200 7801.