The scope of this Practice Note is 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: Nurseries and Garden Centres
Sub Class: Garden Centre, Nursery
Type: Not applicable
Hereditaments within this Class/ Sub Class are mainly retail operations that sell a range of plants and associated gardening products. Quite often plants have been bought in from specialist nurseries (often in GB or the continent), although some centres will propagate, grow or harden plants on site.
The types of centres in NI vary widely, ranging from rural centres operating out of former agricultural buildings to modern purpose built centres with high quality ‘retail warehouse’ structures on site.
The larger properties within this class will have significant permanent retail buildings and display areas. They may also display and sell a wide variety of items apart from plants to include gardening products, furniture, hard-landscaping, pond equipment, and outdoor clothing etc. Several centres also provide on-site restaurant facilities.
While most operations are mainly retail there are garden centres more akin to nurseries and which operate on a wholesale basis either solely or with limited retail areas/public resort.
- If the centre is less than 0.25 acres (0.1012 ha) then it is deemed rateable regardless of use. [Reference; The Rates (NI) Order 1977, Schedule 1, Para 1(a)]. See Appendix 1.
- If a centre is used solely as a nursery ground or market garden then providing they are 0.25 acres (0.1012 ha) or greater they are not rateable.
- Where public resort exists then the valuer must identify and distinguish retail areas, whether open or closed, from areas used solely as nursery ground or market gardens. These retail elements may then be held rateable. In some situations public resort may be considered de-minimus and in these instances one would expect to see no signage offering items for sale, no open display areas, no price tags, no access or staff only access to propagation/growing areas.
There may be concession/license/lease agreements with a third party e.g., paving supplier, car wash, garden shed sales etc. - in these cases it is a matter for the District Valuer to determine if they should be treated as a separate hereditament.
This Practice Note does not apply to the valuation of those garden centres that are an integral part of large DIY type retail warehouses. These should be valued under a separate Practice Note.
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’’.
See Appendix 1 for legislation specific to this class of property, in relation to land and buildings used in connection with market gardens and nursery grounds.
Gardens Centres of a retail nature generally fit into Class A1 of The Planning (Use Classes) Order (Northern Ireland) 2015 with a bulky good restriction that is applied to most retail uses outside of a town centre. If the use is more intense such as a nursery, then they would be treated ‘sui generis’ which basically means in a class of their own.
Valuation approach for 2023
The Comparative method of valuation is to be retained as the approach for this type of hereditament.
See Appendix 2 for the classifications adopted to ensure consistency of approach to the application of value.
Rent and Lease Questionnaire
For this class of property Rent and Lease Questionnaires (RALQs) were issued by the Practice Note author.
For advice on any aspect of this Practice Note contact LPS on 0300 200 7801.
Appendix 1: Schedule 1 Rates (Northern Ireland) Order 1977
Definitions of Agricultural Land and Agricultural Buildings
1. In this Order, Agricultural Land —
(a) means any land used as arable, meadow or pasture ground only (including pastoral land), land used for a plantation or a wood or for the growth of saleable underwood, or land exceeding 0.1012 hectare used for the purposes of poultry farming, market gardens, nursery grounds, orchards or allotments, but does not include land occupied together with a house as a park, gardens or pleasure grounds, or land kept or preserved mainly or exclusively for purposes of sport or recreation or land used as a racecourse; and
(b) includes land occupied with, and used solely in connection with the use of, such a building as is mentioned in paragraph 2(1) (b).
2. In this Order, Agricultural Buildings —
(a) means buildings occupied together with agricultural land and used solely in connection with agricultural operations thereon, or buildings being or forming part of a market garden and used for the purposes thereof...,
4. In determining for the purposes of this Schedule whether anything used in any way is solely so used or whether any use of it is its sole use, no account shall be taken of any time in which it is used in any other way if that time does not amount to a substantial part of the time during which it is used.
1. Both Agricultural Land and Agricultural Buildings are not hereditaments within the provision of the above Rates Order.
2. Land used for the purposes of a market garden or nursery grounds must exceed 0.1012 Ha (0.25 Ac) in area, in order to qualify as Agricultural Land. Land under 0.25 acres is therefore rateable.
3. Buildings being or forming part of a market garden or nursery ground can include glasshouses, poly-tunnels, etc (if used for plant propagation, growing-on, hardening plants etc in readiness for sale). These buildings do not need to be occupied together with agricultural land in order to fit with the statutory requirements of Para 2 (a).
4. In relation to Schedule 1 Paragraph 4, where a building is used for part of the year for growing and part for other purposes the District Office must decide if it still satisfies the agricultural building definition. If a building is primarily used for ‘growing’ and occasionally used for storage, i.e. over the Christmas period, then it may well still satisfy the requirements of Schedule 1.
Appendix 2: Garden Centre classifications
Self-contained garden centre located within a retail warehouse type building and commonly situated in prime retail locations with excellent transport links. The main buildings will have the appearance of modern retail warehouses. Modern restaurant/café facilities are likely along with a substantial and superior range of stock including plants, leisure products, homeware and clothing. There is currently only one Category A garden centre in NI.
Superior purpose built garden centres or in some cases retail warehouses or high quality conversions, acting as “destination” type centres for the province. They may be found nearby residential catchments or in out of town locations. They offer the customer a high quality retail experience, with a wide range of both gardening and leisure products, often with café facilities on site. They will tend to offer more limited homeware and clothing ranges, if any.
Such garden centres are generally modern or high quality conversions serving nearby residential catchments. Due to size and range of stock they are likely to draw trade from a wider catchment but generally not province wide. The variety and range of gardening and or leisure products will not be as substantial as centres featured in Category B. Café facilities may be provided.
These will generally be good quality garden centres serving a local market and can be found in both urban and rural locations. Permanent buildings will tend to be conversions and of mixed quality. Glass houses and poly-tunnels also feature and the business is generally heavily geared towards the sale of plants and gardening accessories with limited leisure products. Some may have café facilities but these will be small scale.
These are traditional small local garden centres primarily for plant sales and tend to be located in rural or semi-rural locations. Typically, buildings are basic quality converted buildings, with a mix of light weight structures including glasshouses and poly-tunnels often with significant areas of loose surface open displays.