Utilities (Gas) (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 / Subclass / 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, and 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: Gas
Type: Cumulo Basis

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”.

The gas networks are valued on a “cumulo” basis and Article 40(4) of the Rates (NI) Order 1977 applies.

“Subject to any other statutory provision, where a hereditament is situated partly in one district and partly in another or others, the Commissioner may treat the hereditament in a valuation list as if it were wholly situated in either or any of those districts or may apportion the net annual value or the capital value of the hereditament between the several districts.”

Valuation approach for 2023

The valuation approach is the Receipts and Expenditure (R&E) method for this type of hereditament.

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.

Rent and lease questionnaire

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.