Car Parks (including Covered, Multi Storey, Open) (Non Domestic Valuation practice notes)

Part of: Non Domestic Valuation practice notes (NI Reval2023)

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.


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 April 2023.

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


This Practice Note refers to property classified as:

Class: Car Parks
Sub Class: Covered, Multi-storey, Open
Type: Private, Public

Legislative background

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

“Subject to the provisions of this Schedule, for the purposes 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”.

Regulatory Legislation

A car park also requires planning consent under the Planning (NI) Order 1999 with regard to Planning Policy Statement 3 (February 2005) and the Belfast Metropolitan Transport Plan 2020.

Valuation approach for 2023

The R&E method of valuation (shortened) is to be retained as the approach for this type of hereditament.

The whole car park is considered to be a single hereditament except when a lease/licence exists on single or groups of spaces. In this case such spaces are treated as separate hereditaments.

Where rental evidence exists for single or groups of car park spaces, these rents are devalued to produce a matrix by location.

On car parks where turnover evidence is available (multi-storey Car parks), a simplified Receipts & Expenditure (R&E) method is used.

Adjustments may be made to the rate per space to reflect particular characteristics such as operating hours, occupancy rates, poor access/ layout, poor surfacing, etc.

Research by the Practice Note author concluded that there was insufficient rental evidence available to develop a fully comparative approach.

In the absence of rental evidence, or a suitable unit of comparison to permit such rental evidence to be reliably analysed, the preferred method of valuation may be either the R&E method or the Contractor’s basis. Where the nature of the occupation of the property is primarily concerned with achieving anticipated profit, and the tenant’s rental bid is, therefore, likely to be based upon a consideration of receipts and expenditure, then in the absence of reliable rental evidence, the R&E method may be the most appropriate method of valuation to adopt.

Source: The Receipts and Expenditure Method of Valuation for Non-Domestic Rating Guidance Note produced in 1997 by the Joint Professional Institutions' Rating Valuation Forum which consists of the RICS, the IRRV, the RSA, the SAA, the VLA and the VOA.

Step 1

Gross Receipts will be determined by taking into account all income reasonably to be derived from occupation of the property. A period of three years accounts, prior to the AVD should give sufficient information to establish a fair and reasonable indication of the trading position. In the case of new ventures where trading accounts do not exist, refer to the accounts of similar ventures, or to the business plan prepared for the new occupier.

In general, receipts should include all income derived directly and indirectly from occupation of the property.

Step 2

The proper Cost of Purchases made in order to produce those receipts should be deducted to determine the Gross Profit. Such costs relate only to those purchases which form part of the venture undertaken.

Step 3

Deduct the Working Expenses from the Gross Profit to determine the Divisible Balance. Outgoings considered as allowable working expenses are those incurred as a result of the operation. For example, salaries, National Insurance payments, provision of services, insurance, phone bills, advertising, Head Office expenses. However, a mortgage payment, which is an expense of the business, is not an expense for a rating valuation.

Step 4

The Divisible Balance (or net profit) is the remaining sum available to be shared between the landlord, and the tenant. It comprises two main elements:

a. The Tenant’s Share – to provide a return on any tenant’s capital employed and a reward to the tenant for his venture reflecting the extent of the risk and the need for profit. It must be a proper and sufficient inducement, not merely a fraction of the divisible balance. A 50/50 split of the divisible balance is adopted as a last resort. This is deducted from the Divisible Balance to leave:

b. The Landlord’s Share – i.e. the amount available for the payment of rent and rates.

The above sets out the methodology for assessing a rent using the Receipts and Expenditure. It may also be possible to determine a ‘shorthand’ approach whereby a percentage is applied to the Gross Receipts to determine a rental value. The NAV can be devalued to an overall £/m2 for comparative purposes.

Where rental evidence is available the comparative method is adopted. Car park spaces which are let on a licence basis and can be identified, should be valued on an individual price per space based on rental evidence, this includes individual lettings within multi storey car parks. Where rental evidence is not available a comparison should be made on a “like for like” basis to arrive at a relative assessment. This is subject to Valuer review and amendment to reflect specific site characteristics.
Car parks provided by public authorities and the Department for Infrastructure, where no charges are levied, are of a public nature and are occupied and used for the purposes of a public service, supporting the local economy, traffic management and safety. Accordingly, car parks in this category are not valued.

On street pay-and-display bays and taxi ranks form part of the public highway and are not rateable hereditaments.

Car parks, whether charges are levied or not, which form part of Universities, Hospitals, Airports, Railway Stations and Bus Stations are already included in their valuations, as they are reflected in the site areas and external works used in the contractor’s valuations or within the Cumulo.

However, if the operation and charge collection is licensed to a third party, this could give rise to a separate rateable hereditament to be valued in line with car parks in the vicinity.

Parking at Shopping Centres and out-of-town retail centres which is free of charge, is reflected in the passing rents of the units.

For multi-storey car parks and large surface car parks where charges are levied, fee paying public car parks occupied by local authorities or Department for Infrastructure, the full Receipts & Expenditure method should be used. Where no turnover is available, comparison should be made primarily on rate per space, based on the analysis of the percentage of Gross Receipts evidence on other comparable car parks.

Figures may be adjusted to reflect voids and location difficulties.

Rent and Lease Questionnaire

For this class of property RALQs were issued centrally by LPS and analysed by the Practice Note author.


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

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