Decapitalisation rates to be used for the revaluation of certain non-domestic property in 1995 will be 5.5% for mos...
Decapitalisation rates to be used for the revaluation of certain non-domestic property in 1995 will be 5.5% for most property and 3.67% for education properties and hospitals. The rates were announced today by David Curry, Minister for Local Government, Housing and Urban Regeneration.
The Valuation Office Agency and Scottish Assessors are currently revaluing all non-domestic property. The revised values will come into effect on 1 April 1995.
Valuation of non-domestic property for rating is made by reference to direct rental evidence or rental evidence for comparable properties. For certain types of property for which market evidence of rental values does not exist, valuation officers have regard to the capital costs of providing a replacement for the property concerned. These costs are converted into an annual value by the application of the decapitalisation rate which is an estimate of the annual rate of return which might be expected on capital investment.
The types of property to which this valuation method - known as the 'contractors test' - applies include chemical works, refineries, sports centres, schools and hospitals. Following today's announcement, the rates will be prescribed in regulations which will be prepared later this year and will be subject to negative resolution by both Houses of Parliament.