The scope of this Practice Note is solely to ensure a consistent valuation approach for this Property Class/Subclass/Type for Non-Domestic Revaluation 2023 and subsequent entry in the new Valuation List which becomes effective on 1st April 2023.
The basis of valuation for new entries in the Valuation List, and Rating Revision cases after 1st April 2023, is Schedule 12 (2)(1) of the Rates (NI) Order 1977.
This practice note refers to property classified as:
Class: Commercial Unclassified
Sub Class: Showhouse
Showhouses or apartments are generally provided by developers to allow prospective buyers to appreciate the quality and layout of properties when completed and are advertised on marketing material as a showhouse, as opposed to a completed property ‘for sale’.
A property can be valued under this scheme as a showhouse.
- If it is for sale or not.
- If it is completely furnished, partly furnished or unfurnished but fitted out e.g. kitchens, bathrooms, tiles, light fittings and therefore is capable of immediate occupation.
It is commonly found that the showhouse within a development is a completed dwelling which has been fully finished and fitted out by developer/builder. The furnished showhouse is not only a means of selling houses but also for advertising furniture and soft furnishings. A sign or notice indicating the property is a showhouse is good evidence of its non-domestic use, and advertised ‘open viewings’ on certain days/ times is also common.
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”.
Valuation approach for 2023
The Comparative method of valuation is to be retained as the approach for this type of hereditament. The estimated open market capital value of the showhouse should be determined as at 1st October 2021 (not the domestic capital value AVD used for domestic rating purposes) and devalued to an annual rental value. The recommended devaluation figure will be derived from an analysis of rental information.
The market value should reflect the level of finish, and if the showhouse is finished to a higher standard than the other houses in the development, consideration should be given to increasing its value.
Sales offices are usually sectional buildings, portacabins or converted garages and are to be valued using the appropriate rental values derived from analysis of similar property types.
Rent and lease questionnaire
For this Class of property Rent and Lease Questionnaires (RALQ’s) were not issued as properties are normally owner-occupied.
For advice on any aspect of this Practice Note contact LPS on 0300 200 7801.