From 1 April 2023, the rateable values of all non-domestic properties in England will be updated by the Valuation Office Agency (VOA) to reflect the property market as at 1 April 2021.
Since November 2022 organisations have been able to view the proposed valuation. They can challenge a property’s rateable value if they think it’s wrong.
For most properties the valuation is based on an estimate by the VOA of the property’s open market rental value on 1st April 2021.
However, there are specialised buildings that do not have an open market rent, for example, larger industrial buildings and public buildings, universities, etc. For these the ‘contractor’s basis of valuation’ can be used. And it is here that BCIS data will prove useful:
The first stage of the Contractor’s Basis is to estimate what it would cost to construct the property, including all the buildings, site works, and all rateable structures and rateable plant and machinery within the property, on an undeveloped site.
The estimated cost of replacement should include all of the elements that would go to make up an actual cost. Design costs, site works, provision of services and supervision costs (including fees) should all be included in the estimated replacement cost. In most cases costs will relate to the actual property, but there may be cases where it would be appropriate to cost a modern, simpler or smaller substitute.
The estimate of the replacement cost can be achieved either by:
If the original cost of the building, structure or plant and equipment are available the cost information will need to be adjusted to correspond with the valuation date. BCIS has different indices for buildings, civils and plant and equipment, etc. that could be used, although care needs to be exercised to ensure that an appropriate index is applied.
If unit costs are used the valuer will also need to adjust for any difference in cost levels between the location of the property being valued and the source of the cost information.
The costs estimated relate to the provision of new buildings, structures, plant and equipment, etc. As it is the actual property that has to be valued, in its existing physical state, adjustments should be considered at this stage. This is to reflect certain deficiencies in comparing the actual property with the ‘new’ property that forms the basis of the estimate.
BCIS Online contains:
BCIS Plant and Equipment Online contains:
BCIS Schedule of Rates contains:
BCIS Running Costs Online contains:
The Contractor’s Basis of valuation for rating purposes
RICS guidance note,
UK 2nd edition,
The Valuation Office Agency’s (VOA) technical manual for the rating of business (non-domestic) property.
From: Valuation Office Agency
Published 5 May 2017