My honourable friend the Minister for Local Government (John Healey) has made the following Written Ministerial Statement.
I have today published a consultation paper, and draft regulatory impact assessment, to seek views on the use of the “contractor’s method of valuation” in non-domestic rating valuations in England for the 2010 revaluation.
Rateable values are assessed independently by the Valuation Office Agency and are generally based on annual rental values. Most are assessed having regard to actual rents but such evidence is not always available. In about 11 per cent of cases, rateable value is based on capital values (found from the cost of construction and land values) which is then “decapitalised” to give an annual value representing the rateable value. This is called the “contractor’s method of valuation”. The decapitalisation rate used in the valuation is prescribed by the Government.
The consultation paper I have published today contains proposals:
to continue to prescribe the decapitalisation rate for the 2010 revaluation;
to retain the existing groupings of properties subject to each of the two decapitalisation rates, and
as to the methodology to be used to determining the decapitalisation rates.
We will make final decisions on these proposals and, in the event of continued prescription, determine the decapitalisation rates in the autumn of this year in light of the consultation responses.
Copies of the document have been placed in the Libraries of both Houses and can be accessed via the Department for Communities and Local Government website at: www.communities.gov.uk/publications/local government/decapitalisationrate.