Non Domestic Rates Revaluation 2015 - Decapitalisation Rates: converting cost to rateable value

As part of the revaluation process properties are valued for rates by reference to an estimate of rental value (net annual value or NAV). Some specialist properties are rarely let however and therefore direct open market rental evidence is not available to assist with valuing them. Rental value has to be determined by reference to construction costs and converted to an assessed rental sum through the use of ‘decapitalisation rates’.