Historic properties
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
1.1 This class will include properties occupied by charitable trusts, by the UK charity for the preservation of historic properties, the English heritage charity, the Welsh Government’s historic environment service, and other individuals and organisations.
1.2 Hereditaments will be buildings of historic interest/importance (including those set in a related historical setting) where the building/setting is the main attraction together with its historical context. Preservation and conservation are the prime motive for occupation, and the majority of any artefacts or collections on display will be related to or contemporary to the host building and/or its historical setting.
1.3 Properties in this class are many and varied, ranging from ancient monuments with unrestricted access (“humps & bumps”) to stately homes. They may have associated facilities such as an admission kiosk, cafe, shop, exhibition areas or more extensive visitor centres.
1.4 This class includes property with industrial, religious, military, architectural, social, or local historical significance.
1.5 This section applies to the following types of property:
- premises which comprise a “stately home” where, despite that description, the principal use is non-domestic. There may be living accommodation for a caretaker, or similar, within the hereditament (in which case it will be a composite hereditament) but the principal use will remain non-domestic
- premises where the principal use is as a residence but where the house is also open to the public, may include use for functions (including weddings) or even offer overnight accommodation
- properties associated with famous personages maintained solely for public viewing. There may be displays of artefacts that are contemporary with that occupation and which serve to illustrate and celebrate the life and achievements of that person. There is usually an admission charge
- sites of industrial/social/military/religious/historical significance. Generally, the prime motive for occupation of these sites is the preservation and conservation of the buildings in their original setting or landscape. They are varied in character and examples include former industrial complexes such as tin mines with or without working machinery, original farm complexes with reconstructions of farming life, restored or preserved military installations such as forts. Any collections of artefacts on display will be related to the site and its context
- other historic buildings including the remains of priories, abbeys, towers, forts etc
- small historic buildings or other structures such as tithe barns and dovecots
- windmills and watermills
- sites of ancient ruins and archaeological landscapes. These are many and varied including ancient hill forts, abandoned medieval villages, standing stones, Roman remains, castles etc. Some may be free with unrestricted public access; others may charge for entry. Facilities range from an admission kiosk to extensive visitor facilities showcasing the history of the site and modelled reconstructions. There may also be displays of artefacts found at the site. And visitor facilities such as cafes and shops
- gardens open to the public where they are of national significance or are occupied by the major UK charity for the preservation of historic properties, the English heritage charity and the Welsh Government’s historic environment service
- royal palaces open to the public
1.6 Historic properties occupied as museums
1.7 Some, historic properties are occupied as museums where the items on display are not solely intended to “show” the property and may have no connection with the property. Where the host building, although of a similar historic character is primarily serving to house a collection of
artefacts that are not related to the host building or its setting then the property should be valued by reference to Rating Manual section 5a: museums and art galleries.
1.8 Historic properties that are leisure attractions
1.9 Where the primary purpose of occupation is not for the preservation of the historic building or garden or setting, but it is as a leisure attraction, valuation should be by reference to Rating Manual section 5a: Leisure attractions. This alternative mode or category of occupation may be indicated by a charge for entry. These sites will normally be operated with a view to making a profit.
2.1 List description: historic property and premises
- Primary description code: LX
- Scat code: 265, suffix S
2.2 List description: show gardens and premises
- Primary description code: LX
- Scat code: 265, suffix S
This description is appropriate to use where the garden is of national significance or occupied by the UK charity for the preservation of historic properties, the English heritage charity and the Welsh Government’s historic environment service. It is also appropriate when the garden of national importance is part of a composite hereditament.
2.3 Alternatively, Scat code 284 (Leisure Attractions) should be used with a suffix of S and the valuation of these gardens should follow the guidance on Leisure Attractions to be found in Rating Manual section 5a: Leisure attractions.
2.4 List description: windmill and premises
- Primary description code: LX
- Scat code: 302, suffix S
These vary from derelict monuments to fully working corn mills with additional facilities such as shops, cafes and displays. Watermills should be assessed with Scat 265.
2.5 List description: royal palace and premises
- Primary description code: LX
- Scat code: 240, suffix N
Where the assessment is of part of a royal palace used for another purpose such as offices, the description will follow the type of occupation.
3.1 Historic properties, which includes gardens of national importance, are the responsibility of the National Valuation Unit (NVU).
3.2 All Royal Palaces are also the responsibility of the National Valuation Unit.
4.1 The Historic Properties Class Co-ordination team (CCT) has overall responsibility for this class being responsible for the approach to and accuracy and consistency of valuations. The CCT will deliver a practice note describing the valuation basis for revaluation and provide advice as necessary during the life of the rating lists. Caseworkers, property researchers and property inspectors have a responsibility to:
- follow the advice given at all times
- not depart from the guidance given on appeals or maintenance work, without approval from the CCT
- seek advice from the CCT before starting on any new work
5.1 Unit of assessment
5.2 VOs will need to identify the unit of assessment having regard to the usual rules of rating. This is particularly relevant where the occupier is a charity but trading companies may be operating from the hereditament.
5.3 Significant detriment test
5.4 Generally, two or more parts in one occupation separated by a public road should be treated as separate hereditaments. However, if it is evident that one part cannot be separately let/occupied without significant detriment to the other part then it may form a single hereditament. Refer to Rating Manual: Section 2 Valuation Principles Part 2: Hereditament.
5.5 Occupied for wholly different purposes
5.6 Furthermore, property in the same occupation may fall to be assessed as two or more hereditaments if the two parts are used for wholly different purposes (see North Eastern Railway Co. v York Union (1900) 1 QB 733). General offices at a railway station (which were concerned with the whole railway rather than just the station where they were located) have been held to be a separate hereditament to the station as they are used for wholly different purposes (Re Southern Railway Company (1935) 6 DRA 177). Whether separate assessments at historic properties occupied by one organisation are appropriate will depend on the facts of each case but, as general guidance, the following may require separate assessments:
- offices and administrative facilities (such as training centres) where the use is not primarily concerned with the historic property itself
- catering and retail facilities outside the pay boundary of the historic property where it is likely that a significant proportion of customers will not visit the historic property
- property used for the provision of short stay accommodation or self-catering lets and associated ancillary accommodation
- property used mainly for commercial purposes unconnected with the heritage of the property (such as horse trials or conference let outs)
5.7 Separate letting
5.8 In the case of additional facilities let to and occupied by separate individuals these must also be assessed separately.
5.9 Trading companies/charity occupations
5.10 The rateable occupier for many historic properties may be a charity. In such cases some, or all of the trading operations are likely to be run by separate, though wholly owned, trading companies set up by the charity for that specific purpose. The charity and trading company are required by law to be separate corporate entities, with an arm’s length agreement between them when one occupies the property of the other.
5.11 Following the Cardtronics decision (Cardtronics UK Ltd and others (Respondents) v Sykes and others (Valuation Officers) (Appellants) 2020 UKSC 21) it will usually not be correct to have a separate rating assessment for the premises under the management of the trading company. Where a potentially separate hereditament can be identified, particular note should be taken of the advice on paramount occupation, following the Cardtronics and Ludgate House decisions, in paragraph 2.8 of the Rating Manual guidance on hereditament and paragraph 3 of the Rating Manual guidance on rateability.
5.12 Composite hereditaments - domestic/non-domestic borderline
5.13 The hereditament will be composite unless the circumstances of occupation suggest that it is either wholly non-domestic or wholly domestic. Regard should be had to Rating Manual: section 2 – Valuation principles Part 2: Hereditament and Part 5: Domestic and Non Domestic Borderline
5.14 Composite hereditaments - de-minimis
5.15 VOs should take a reasoned view of what comprises ‘de minimis’ non-domestic use of the living accommodation. Whilst each case must be determined on its own merits, in deciding whether the use of a domestic property for non-domestic purposes is material, the VO will need to have regard to the effect of the extent, frequency and intensity of the non-domestic use, and to any modifications made to the property to accommodate that use.
5.16 It is difficult to be specific on this point as circumstances will vary. Where, for example, a house is only open by appointment the non-domestic use would probably be de minimis. The very existence of an appointments system would enable the occupier to organise opening times to cause minimal inconvenience, whereas the occupiers of properties with specified opening times would need to organise their lives around those times.
5.17 It is unlikely that the hereditament would be composite and consequently rateable where the house (or its garden) is only open for a handful of days, or where it opens less than 28 days as a condition of a grant award or tax relief, or the garden only opens as part of the National Garden Scheme.
5.18 However, the number of open days is only one of several items to be considered. For instance, rooms which are open to the public but have not been adapted and are otherwise used by the family for domestic purposes and, in addition, no special provision has been made for visitors’ cars, are unlikely to be non-domestic. However, a civil licence, or regular corporate use is likely to be firm evidence of non-domestic use, in the majority of circumstances.
5.19 Account will also need to be taken of any other non-domestic use, such as the holding of functions including weddings, or exhibitions or such like.
5.20 Where only limited and infrequent use is made of the living accommodation, the garden or grounds for non-domestic purposes and the accommodation reverts to domestic use between non-domestic usage, and there have been no adaptations for non-domestic purposes, then it is likely that such non-domestic use would be treated as ‘de minimis’.
5.21 NIL assessments - Hoare (VO) and Spratling (VO) v The National Trust 1998 RA 391
5.22 This case concerned two stately homes: Petworth House and Castle Drogo. The Lands Tribunal found as a fact that the only hypothetical tenant for the properties was the actual occupier. Therefore, the Court of Appeal considered it was necessary to decide how much rent this particular occupier would pay under the rating hypothesis for the hereditaments. The Court of Appeal considered that where there was only one possible hypothetical tenant, the known policies of that hypothetical tenant should be taken into account. They called this the principle of reality (Gibson at 415).
5.23 The Court of Appeal accepted that this particular occupier would not take a property unless it was accompanied with sufficient endowment to ensure that their own central resources were unaffected. Under the principle of reality, this known policy of the hypothetical tenant had to be included in the considerations. This was sufficient evidence that, under the rating hypothesis, they would not pay a rent for the hereditament and, therefore, a nil assessment was appropriate.
5.24 Implications for the National Trust
5.25 It follows from the decision that many loss-making historic properties where the only hypothetical tenant is this particular occupier should be assessed at nil. However, this will not always be the case. The decision has less relevance for properties occupied by them where, for instance, there is more than one hypothetical tenant, or where they may sell the property (i.e. it is not inalienable), or where rental evidence from a different use can be considered relevant. Such hereditaments may merit a substantive assessment and guidance as to valuation is provided in section 8 below, including properties occupied by this particular charity that are capable of making a profit.
5.26 Implications for other occupiers
5.27 In the case of Hoare v National Trust there was evidence that they would not pay a rent for the appeal hereditaments. For most other occupiers such evidence is unlikely to exist. Indeed, in some cases evidence will exist that the hypothetical tenant would pay a rent. Therefore, this Court of Appeal decision is unlikely to support nil assessments on other historic properties because:
- it was found in this case that this unique occupier would not spend their own money on acquiring and maintaining loss making properties (they would only take a property if it came with sufficient endowment) which implies that they would also not pay a rent for loss making properties. Other occupiers will have chosen to spend their own money on a loss-making hereditament and this is good evidence that they would also choose to pay a rent
- the Court of Appeal considered that its decision did not compromise the doctrine of the overbid. Therefore, assessments that rest upon overbid - in particular those occupied by local authorities - are unaffected
- this unique occupier could not sell the properties (they were inalienable). Most other occupiers can, if they wish, sell a loss-making hereditament. The fact that they do not supports the assumption that it is of value, and therefore they would pay a rent for the hereditament
- this unique occupier was the only hypothetical tenant - many hereditaments will have more than one hypothetical tenant
5.28 Nevertheless, if the actual occupier is perceived as being the only hypothetical tenant of a loss-making historic property and there is evidence that they would not pay a rent then a nil assessment may be appropriate. However, the Court of Appeal did say that the mere fact that the hypothetical tenant gives evidence that he would never pay a rent was not conclusive. Clearly, evidence from the ratepayer will be stronger if capable of independent verification.
5.29 Implications arising from the museum’s cases
5.30 The rating list description of ‘museum and premises’ is distinct from ‘historic property and premises’ and the use of the former is described above at paragraph 1.2. Accurate descriptions in the lists are important, but the distinction does not mean that there are not any overlaps or dictate that the method of valuation will always be on a different basis. Valuers will need to consider the facts for each property following the York and Exeter cases on museum.
5.31 In Stephen G Hughes (VO) v Exeter City Council [2019] RA 73, which followed Hughes (VO) v York Museums and Gallery Trust [2017] UKUT 200 (LC), the mode or category of occupation for museums, historic properties and leisure attractions was considered at paras 45-48. The decision referred to Williams [2001] endorsing the use of general categories for the purposes of embracing the reality principle in rating, with a reminder that differences in categories of business may influence the valuation method used but valuation method does not determine the mode or category.
5.32 The Tribunal concluded at paragraph 204 that the VO’s approach: “..focuses too narrowly upon what he acknowledges to be a broad spectrum of heritage assets. The essential quality of such an asset is its cultural, artistic, historic, or scientific value and significance. We do not think it is appropriate to categorise them too narrowly (and, at least in part, by inappropriate criteria) when undertaking a comparative exercise to see how they are valued in the market. We accept that differences between a specific museum such as RAMM and a specific visitor attraction such as Stonehenge may amount to relevant comparative factors, but we do not agree that there is a clear and material distinction between the two that warrants the one being, in effect, rendered ineligible to inform the type of broad analysis that is appropriate”.
5.33 The Exeter decision goes on to propose that the method of valuation should not be restricted as per the parties’ submissions, i.e. just to the Contractors Basis or the Receipts and Expenditure method. At paragraph 162 : “…There is no legal principle or valuation practice which would preclude the modification of the R&E method for properties of the unusual kind we have in this appeal, e.g. by use of an appropriate overbid or uplift, or a revenue-based method (e.g. percentage of gross receipts), or perhaps a percentage or amount related to outgoings to reflect a socio-economic or cultural motivation to occupy, so long as all relevant considerations are taken into account and weighed..”.
5.34 Valuation principles and practice for the historic properties class are discussed in more detail in the Practice Notes relevant to each rating list. See also paragraph 8 below.
6.1 Where practicable all buildings should be measured to Net Internal Area (NIA) in accordance with the VOA Code of Measuring Practice. Plans should be obtained of all parts open to the public together with details denoting parts of the non-domestic assessment not open to the public. A note of the domestic parts of the hereditament should also be provided. It is essential that areas be recorded separately for all shops, restaurants, cafes, tea rooms, outside sales areas and function rooms.
6.2 Brochures should be obtained and dated where available.
6.3 The following information should also be recorded:
- entry charges including details of any concessionary rates, yearly rates, free admissions
- times and days of opening including details of any seasonal closures
- details of any other facilities provided such as use for conferences and functions such as weddings or use of the grounds for concerts, car rallies or other events or the availability of caravan or camping facilities
- if the occupier is a charity details should be obtained of any trading company operating all or part of the property, e.g. shops and restaurants (see paragraph 5.5 above)
7.1 All plans and surveys should be stored in the property folder on EDRM with the rating survey details captured on the non-bulk server.
8.1 Method of valuation
8.2 In general, regard should be had to any rental evidence for any properties in this class, but this is extremely limited.
8.3 Historic properties occupied with a view to making a profit from the non-domestic element can be valued having regard to the income and expenditure evidence and more detail is provided below on the factors to be taken into consideration.
8.4 Many historic properties are not operated for profit nor capable of being operated for profit or they may be composite. Where the primary motivation of the actual occupier is not profit or income – there may be many different motivating factors such as heritage, conservation, education, or social and economic benefits or to offset the costs of maintaining the family home. There is, nonetheless, benefit attached to the occupation. Quantifying the value of this benefit is problematic, however.
8.5 In the LT Scotland determination in Roxburghe Estates v Assessor for Scottish Borders Council case in respect of Floors Castle (LTS/VA/2002/3), it was accepted that applying a percentage to the gross turnover to be a relevant, if crude, guide to the value of the occupation.
8.6 In general terms, hereditaments that are not capable of being operated for profit, and where there is no evidence of rents, fall to be valued on the contractor’s basis. However, this is not suitable for most historic properties because any occupier would never be interested in a substitute.
8.7 Where greater emphasis is placed on arranging conferences or weddings or other functions, then consideration should be given to the hereditament being treated as a ‘function venue’ and reference made to Rating Manual section 5a: Civil ceremony, wedding and function venues.
8.8 Valuation schemes for each rating list are included in the Practice Notes.
8.9 Opening as a condition of grant/tax relief
8.10 Properties may be required to open as a condition of a grant award or tax relief however those which do so on a scale which moves the hereditament away from being wholly domestic are likely to be concerned with making a profit to offset costs as well as satisfying the terms of the grant award or tax relief. Where it can be shown that the sole reason for opening the property to the public is to satisfy the terms of a grant award or to gain a tax relief, and the occupier derives no other benefit from the non-domestic use, then consideration should be given to whether or not this non-domestic use is de minimis. Otherwise, the actual trading position of the non-domestic use should be used to inform the rateable value of the whole of the composite hereditament.
8.11 Gross receipts
8.12 When considering gross receipts, regard must be had to assessing income from all sources which is likely to include:
- admissions
- retail and catering sales
- other functions and corporate activities, providing such use has not been separately assessed
- revenue grants, legacies, and donations that the hypothetical tenant could reasonably expect to receive may be considered provided they are in respect of the non-domestic use. However, in many cases, such payments to historic properties, whilst they may carry a condition of the house being open, are made in respect of the domestic use of the property as a home (such as for the property’s maintenance) and should be disregarded
8.13 Where entry is free, it will be necessary to estimate a notional income from admissions.
8.14 Where some visitors do not pay for entry, like members of a national organisation, or affiliated organisations, it will be necessary to estimate notional income from these admissions. It is considered reasonable to assume that, in the absence of a membership scheme, one third of the members would still visit and pay for admission. Free visits to properties by members of other organisations are not likely to be significant and will not need an adjustment to the notional income from admissions.
8.15 Expenditure
8.16 In line with the treatment of income, generally regard should only be had to expenditure that can be associated with the non-domestic use of the hereditament.
8.17 Where the hereditament is primarily a residence, as a general rule any expenditure that would still be incurred in the absence of the non-domestic use should be treated as associated with the domestic use and ignored when considering the value of the non-domestic part.
8.18 However, where a clearly defined part of the property is primarily in non-domestic use, and that use is not merely incidental to the domestic use of the hereditament, then expenditure on that part may need to be apportioned between the domestic and non-domestic use. This expenditure would include long-term cyclical repairs where appropriate which will reflect the size, age and construction of the property but are always likely to be greater for Grade I or Grade II* listed properties.
8.19 Apportioning costs will inevitably encounter difficulties when attempting a full R&E valuation and would likely produce a negative result due largely to the high repairing, insurance, and other expenses necessary to maintain the premises.
8.20 In isolation, a lack of profitability should not, however, be regarded as a pointer to a ‘de minimis’ or nil rental value (RV) due to the presence of other motives for occupation.
8.21 Other factors
8.22 Several factors other than visitor numbers and maximising income would influence the rent.
These include:
- the importance of the property to the occupier (the most likely hypothetical tenant). Most hypothetical tenants will be concerned with the preservation of the physical building and its heritage and this will influence the rental bid
- the amount and range of accommodation on show. The size of the accommodation being assessed will have less relevance than for other sectors but will still be relevant. A stately home which illustrates a full picture of life in the house would be more valuable to the hypothetical tenant than one which shows only a small aspect
- the income and expenditure of the hereditament. No hypothetical tenant will have limitless resources and even though the property will not be occupied for profit, the tenant will still have some regard to the trading position. A particularly high running cost may have a downward pressure on the value within the range whereas a low running cost may have an upward pressure
9.1 All valuations should be entered onto the Non-Bulk Server (NBS) under the relevant Scat code. The input of factual data on the NBS will enable valuations to be carried out which follow the recommended valuation approach.
9.2 Additional support is available through:
- Survaid
- The CCT
1. Market appraisal
1.1 As a visitor attraction, historic properties (and their collections) remain popular. The outdoor garden and parkland spaces are more and more appreciated.
1.2 Diversification is on-going. Increased use of “special events” at some venues as well as improved catering and shop facilities has widened the offer and increased visitor ‘stay’ times all helping to boost receipts. Themed and partnership events are also a growing trend. The holding of festivals of all types, weddings, arts events, charity and community events are all common offers. The growth in the use of mainstream social media to attract visitors is also reported widely.
1.3 Where possible some venues have diversified by providing function and/or conference facilities with some properties offering accommodation, usually self-catering holiday lets but occasionally on a bed and breakfast basis. In some cases of privately owned historic houses, the family may now reside in part of the mansion (separate apartment or wing) with the remainder being used entirely for non-domestic purposes.
1.4 For many operators their volunteer workforce is hugely important. There is continued reliance on volunteers in a wide range of roles.
1.5 Many historic properties have introduced the “Gift Aid on Entry” scheme offering non-member taxpayer visitors the choice of a Gift Aid admission ticket or a standard admission ticket. Under this scheme the Gift Aid admission ticket includes a voluntary donation of 10% or more and enables the operator to reclaim the tax paid on the whole ticket price. This provides an additional boost to receipts at participating properties.
1.6 The COVID-19 pandemic had a major impact in the period leading up to the antecedent valuation date (AVD) of 1 April 2021. Details of the various restrictions implemented by statute in response to the pandemic, and of the vaccination rollout, can be found online. In February 2021 the UK Government published its Roadmap out of lockdown for England which set out four steps to relax restrictions. Step 1, easing restrictions on outdoor gatherings, had already taken place by the AVD. The later three stages of the Roadmap for England included
- the opening of outdoor hospitality, and non-essential retail (Step 2, no earlier than 12 April);
- most legal restrictions on meeting others outdoors to be lifted, opening of indoor entertainment venues such as cinemas, casinos and bingo halls (Step 3, no earlier than 17 May 2021); and
- the removal of remaining restrictions on social contact (Step 4, no earlier than 21 June)
1.7 Subsequent to 1 April 2021 steps 2 and 3 took place as planned, but Step 4 was delayed four weeks to 19 July.
1.8 The situation in Wales, both leading up to and after the AVD, was similar although not identical.
1.9 Arrivals of inbound foreign visitors has been very significantly affected by changing restrictions both at home and abroad.
2. Changes from the last practice note
2.1 There are no changes to the broad principles followed for the 2010 and 2017 Rating Lists.
3. Ratepayer discussions
3.1 For the 2023 revaluation central discussions once again took place. No changes to the 2017 approach have been put forward so the property classification bands adopted for the 2010 and 2017 lists should continue to be used for 2023.
4. Valuation scheme
4.1 In respect of any site comprising an historic property, it is important to identify the rateable occupation of all parts since this will inform the adoption of the correct valuation approach which may fall outside of the scope of this practice note. See also Rating Manual 5a: valuation of all property classes: museums and art galleries and leisure attractions.
4.2 Charitable occupiers frequently have parts occupied by their associated trading companies – commonly shops, restaurants and plant sales. Where a hereditament can be identified which is occupied by a separate legal entity (for example a trading company) then this potentially constitutes a separate assessment. However, regard should be had to Cardtronics v Sykes 2020 UKSC 21 (the ATM case) and the facts in each particular case.
4.3 There will be historic properties which warrant an assessment of RV £0 reflecting the repairing liability of the large mansion house element and the inalienable nature of the properties - this assessment usually includes the café/restaurant element, bookshops and some kiosks which are not capable of separate assessment.
4.4 Private properties or gardens open to the public are likely to be composite hereditaments occupied by the owner.
4.5 As for the 2010 and 2017 Rating Lists sites have been classified into category types for the 2023 Rating Lists as set out below:
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Visitor properties with no entry charge, including “humps & bumps”, small ruins, small forts, follies, monuments, towers, dovecotes, tithe barns, gardens or parkland.
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Small castles, small forts, ruins and small historic houses, abbeys, towers, barns etc with an admission point and possibly WCs but without any shop or tearoom or exhibition space.
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Castles, forts, ruins and small/medium historic houses and notable person’s house, with an admission point and other visitor facilities e.g. WCs, small exhibition/interpretation space, small shop and/or tearoom.
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Castles, forts, ruins and larger historic properties with more substantial facilities including visitor reception building, larger shop, tearoom(s), exhibitions, education rooms or visitor recreation facilities etc.
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Sites of industrial/social/military/religious/local historical significance where the prime motive for occupation is the preservation of the buildings in their original setting or landscape. Also, dwelling houses of famous personages. There may be collections of artefacts on display related to the site and its context. With/without small shop, tea room or small exhibition.
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Stately homes and large historic houses with property specific collections and other large historic properties, forts and sites with extensive liabilities.
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Gardens and landscaped parkland and other outdoor natural attractions of historic or national interest with or without ancillary buildings.
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Sites of historic or national interest/importance where there is not usually a deficit of expenditure over income
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Operational property – e.g. separate administrative offices (for admin of other property)
4.6 The 2023 valuation approach for non-composite properties, and composites where the owner does not reside in the domestic part, is as follows:
4.6.1 The valuations for these properties will be built up of two elements using the above categories (A-E).
1. A value for the historic property or garden alone – which will then allow for easy comparison between sites – the basic RV - and
2. An addition to reflect any additional income streams that will be within the same assessment for example, shop/kiosks/cafes/plant sales or value-significant museum or exhibition space.
4.7 Stage 1 – the first element, historic property or garden only.
4.7.1 Category A. Those properties that are “humps & bumps” do not satisfy the tenets of rateable occupation and will not require entries in rating lists
4.7.2 Categories B – E. For loss making properties and those that show only a cyclical, or one-off profitability:
- minimum value £250-£500 basic RV – this will include those sites with, at best, only a small kiosk, hut, ‘hole in wall ticket sales’ etc. and WCs
- £500-£1,000 basic RV – this will include those sites which additionally have some fully serviced accommodation for staff use/ticket sales/admin offices/sales plus visitor facilities such as a shop and/or tea room. Where the visitor facilities are more substantial, for example with a visitor reception or large café or education rooms, the basic RV will be £1,000
4.7.3 Category F - large historic houses. Following the Court of Appeal decision in Hoare (VO) and Spratling (VO) v The National Trust 1998 RA 391 similar properties which are occupied by the same organisation will be valued at RV £0. This decision flows from the agreed concept that this occupier was the only conceivable occupier for these inalienable properties therefore it does not follow that similar properties in other occupations should be taken as RV £0. Given the repairing and running costs, rarely, if ever, will such a property produce a commercially viable trading profit. They are open to the public for a variety of reasons, dependent on the nature of the occupier. In the case of privately owned property this is usually to mitigate the costs of maintenance. Thus they will have a positive value, albeit a relatively nominal one, dependent on the size and nature of the property and the visitor numbers attracted. The approach to these should have regard to paragraph 4.10 below.
- basic RVs should start at £1,000 and are often unlikely to exceed £10,000
4.7.4 Category G – Gardens. Where the hereditament comprises a garden of historic or national interest, it is likely that a trading company would be in occupation of any shop which will therefore be likely to form a separate assessment, possibly including any café or restaurant element. Again, the ATM case (see above) and the facts in each case will dictate whether there should be separate assessments. Most heritage gardens will show an operating loss, or at best a nominal trading profit. On the rare occasion when a heritage garden will be commercially viable as an attraction it should be assessed in accordance with paragraph 4.10 below. In the absence of any meaningful rental evidence or trading profit it is necessary to look elsewhere for the valuation. There has been no challenge to the concept that heritage gardens have value and that the assessments should not be nil. This acknowledges that there are operators in the market prepared to pay a rent to occupy a prestigious, albeit loss making, garden. Having regard to wider examples of percentage bids applied to low profitability, or loss-making classes, a reasonable expectation would be within the range of 2% - 3.5% of fair maintainable trade (FMT), gross receipts excluding VAT, dependent on the size, nature and turnover of the individual property.
- it will be necessary for the specialist valuer to take a “stand back and look” approach taking into account all the factors affecting the individual property and similar comparable gardens. It is unlikely that a rateable value would be below £1,000, with the majority in the range £5,000 - £20,000
4.7.5 Category O – Operational Properties.
- these will fall to be assessed on the local tone for the type of property concerned (for example, offices, warehouses)
4.8 Stage 2 - the second element, additions.
4.8.1 Where there is exhibition/museum space within the hereditament an addition in the range £500 - £5,000 should be made depending on the size and quality of the space. The minimum of £500 will be for small museums of excavation finds, and the maximum £5,000 for large exhibition spaces,
4.8.2 An addition for non-separately assessed shops, cafes/tearooms etc. should be made in RV £250 bands being broadly based (rounded) from 2% of FMT, net of VAT:
- FMT up to £30,000, addition nil (included in base value)
- FMT between £30,000 - £45,000, addition £500 RV
- FMT between £45,000 - £60,000, addition £750 RV
- FMT between £60,000 - £75,000, addition £1,000 RV and so on
4.8.3 Car parking. Generally car parking is reflected in the basic RV. An addition should only be made for car parks where a charge is made, due to its position close to a town centre, or where used as a car park for walkers etc., which means that it generates income over and above that from visitors to the historic property.
4.8.4 Self-catering holiday lets. This is a separate and distinct use therefore such accommodation will typically be separately assessed. Any within the curtilage of a historic property should be assessed having regard to the local tone for such separately assessed properties and, where located within the historic property itself, to the costs in maintaining that part of the property.
4.9 Exceptions.
4.9.1 Commercially viable properties. Where the property is commercially viable the assessment should be arrived at by applying a rental percentage to the estimated fair maintainable trade (FMT).
4.9.2 Composite properties occupied by the owner. These will normally be private historic houses or stately homes. The motivation behind most privately run historic properties, which are primarily used as a home, will be to make a profit to set against the overall running and maintenance costs of the house including long-term cyclical repairs. Therefore, the trading position of the non-domestic use provides the best guide to the rateable value. Usually, the principal use is as a residence with the house also being open to the public but there are those properties where the commercial use dominates, the owner often only retaining a portion of the house. The non-domestic part will be open to the public but will often also be used for functions (including weddings) and/or corporate entertainment, conferences and such like. This may be in conjunction with significant other visitor attractions in the park, tearooms, restaurants etc. Care should be taken in the valuation of these properties to avoid taking into account costs attributable to the domestic occupation, or those of the greater estate.
- it is to be expected that the assessments of these properties will normally be in the range of 2% - 5% of FMT. The rental percentage adopted must adequately reflect the actual physical features and characteristics of the hereditament and the preservation costs required. It follows therefore that Grade I or Grade II* listed properties will generally fall to be considered at the lower end of the rental percentage range
- if the non-domestic activities overwhelm the domestic element then the RV may be more accurately determined by assessing the hereditament as a ‘function venue’. See Rating Manual section 255 – civil ceremony, wedding and function venues
4.10 The effects of the COVID-19 outbreak need to be taken into account as they would have been anticipated by the parties at the AVD. Trade evidence that includes long periods of lockdowns is unlikely to provide good evidence of the FMT at the AVD. Valuers are advised to take as their starting point the closest reliable trade, which is likely to be the 2019/2020 trading year (ending March or before) and any previous trading years.
4.11 Having established the likely FMT for the 19/20 trading year (ending March or before), the valuer should then consider any further adjustments needed to reflect the receipts envisaged as at 1 April 2021. The reasonable efficient operator (REO) will take a view not only on the trade immediately achievable at AVD, but the trade over a period of time ahead, as they are assumed to be taking a tenancy with a reasonable prospect of continuance.
4.12 Historic royal palaces. The historic royal palaces open to the public should be valued in accordance with the above guidelines.
1. Market Appraisal
As a visitor attraction, historic properties remain popular but face fierce competition from other leisure attractions which offer new technology such as interactive rides, games and educational facilities.
In response, historic properties have moved towards a more “family friendly” experience and introduced some new technology where possible. Often visitor “rules” have become slightly more relaxed and hands-on opportunities are offered where appropriate. Increased use of “special events” combined with the addition of adventure playgrounds at some venues as well as a generally improved catering and shop facilities has widened the offer and increased visitor ‘stay’ times all helping to boost receipts.
Where possible many venues have diversified providing function and/or conference facilities with some properties offering accommodation, usually self-catering holiday lets but occasionally on a bed and breakfast basis. In some extremes cases of privately owned historic houses, the family may now reside in part of the mansion (separate apartment or wing) with the remainder being used entirely for non-domestic purposes.
Although receipts may have increased costs have also risen, often at a greater pace. For many operators their volunteer workforce is hugely important. In 2013/14 the National Trust, with 4.1 million members and 19.9 million visits to ‘pay-for-entry’ properties, relied increasingly on over 60,000 volunteers who gave more than 4 million hours of their time in a wide range of roles. Even so, the National Trust fundraising from various sources was down 20% on 2012/13 due in part to a reduction in legacy income which has been the trend over the last few years.
Many historic properties have introduced the “Gift Aid on Entry” scheme offering non-member taxpayer visitors the choice of a Gift Aid admission ticket or a standard admission ticket. Under this scheme the Gift Aid admission ticket includes a voluntary donation of 10% or more and enables the operator to reclaim the tax paid on the whole ticket price. This provides an additional boost to receipts at participating properties.
2. Changes from the last Practice note
There are no changes to the broad principles followed for the 2010 Rating Lists.
However, on 1 April 2015 the government’s heritage advisor, English Heritage, was split into two separate organisations: i.a new charity, retaining the name English Heritage, with responsibility for managing the National Heritage Collection of more than 400 historic properties and sites and, ii.a non-departmental public body, Historic England, dedicated to offering specialist expert advice and setting policy, promoting constructive conservation and providing support with research, guidance and grants.
As a charity, English Heritage will be in a position to offer an improved experience for visitors, increase visitor numbers and grow membership.
As a result of the division of English Heritage from 1 April 2015 occupation by English Heritage (the charity) no longer benefits from s65A, Local Government Finance Act 1988 which enabled the former English Heritage, a Crown occupation, to have a single rating assessment to cover all aspects of the occupation regardless of mode or category. Since 1 April 2015 occupation by English Heritage’s trading arm and self-catering accommodation on a site will form separate hereditaments where appropriate. Section 5.5 of the main Rating Manual section provides further guidance.
3. Ratepayer discussions
For R2017 central discussions once again took place with agents acting for ratepayers and advising the National Trust, English Heritage and the Historic Houses Association. Positive views were received on the 2010 list approach, it was agreed that the property classification bands adopted for the 2010 list should continue to be used for 2017.
The guidance below reflects many views expressed and whilst it cannot be taken as a formal memorandum of agreement it is expected that the majority of ratepayers’ agents will not seek to challenge the content of this practice note nor the valuation approach to be adopted.
4. Valuation scheme
In previous rating lists various valuation schemes have existed for multiple occupiers such as the National Trust, English Heritage and Cadw. There have been different approaches to the assessment of each of these and charitable trust occupations of historic properties.
In part these differences arise from the unit of assessment, in that
1.The National Trust, English Heritage and other charitable occupiers frequently have parts occupied by their associated trading companies – commonly shops, restaurants and plant sales. Where a hereditament can be identified which is occupied by a separate legal entity (e.g. a trading company) then this constitutes a separate assessment. In addition, National Trust properties commonly have RV £Nil assessments reflecting the repairing liability of the large mansion house element and the inalienable nature of the properties - this assessment usually includes the café/restaurant element, whilst the shops, occupied by their trading company, are separately assessed;
2.Private properties or gardens open to the public are likely to be composite hereditaments occupied by the owner;
3.The majority of other charitable trust occupations currently remain as single assessments but these may be subject to review if a trading company is found to have been created.
Thus with the varying units of assessment it is not currently possible to consider direct “like for like” comparisons between rating assessments of similar properties that happen to be in a different occupation.
As for the 2010 Rating Lists English Heritage and Cadw have been classified into category types for the 2017 Rating Lists as set out below:
| A | No entry charge ("humps & bumps" and sites of small ruins). |
| B | Castle, fort or other ruins, plus admission kiosk. |
| C | Castle, fort or other ruins, including some weather-tight accommodation within the fabric of a building and/or small shop, tearoom or exhibition. |
| D | Castle, fort or other ruins, including substantial new visitor facilities with/without shop or tearoom. |
| E | Industrial monument, Christian heritage, Military and Historic property, either vacant or set out to reflect former use, with/without small shop; tearoom or exhibition. |
| F | Stately home / large historic house with property specific collection |
| G | Garden |
| H | Museum/gallery within historic property |
| O | Operational property – e.g. administrative offices |
4.1 The 2017 valuation approach for non-composite properties, and composites where the owner does not reside in the domestic part, is as follows:
To ensure correct relativity across the various permutations of occupation/separate assessment, the valuations for these properties for R2017 will be built up of two elements using the above categories (A-O)
1.A value for the historic property or garden alone – which will then allow for easy comparison between sites, and 2.An addition to reflect any additional income streams that will be within the same assessment e.g. shop/kiosks/cafes/plant sales or value-significant museum or exhibition space.
Stage 1 – the first element, historic property or garden only
4.1.1 Category A
Those properties correctly falling into existing Category A (No entry charge -“humps & bumps” and sites of small ruins) do not satisfy the tenets of rateable occupation and will not require entries in rating lists.
4.1.2 Categories B – E
For loss making properties and those that show only a cyclical, or one-off profitability:
Minimum value £500 “basic” RV – this will include those sites with, at best, only a small kiosk, hut, “hole in wall ticket sales” etc. and WCs
£1,000 “basic” RV – this will include those sites which additionally have some fully serviced accommodation for staff use/ticket sales/admin offices/sales etc.
4.1.3 Category F - large historic houses.
National Trust properties generally fall to be assessed at Nil RV, following the Court of Appeal decision in Hoare (VO) and Spratling (VO) v The National Trust 1998 RA 391. This decision flows from the agreed concept that the National Trust was the only conceivable occupier for these inalienable properties therefore it does not follow that similar properties in other occupations should be taken as RV £Nil.
Given the repairing and running costs, rarely, if ever, will such a property produce a commercially viable trading profit. They are open to the public for a variety of reasons, dependent on the nature of the occupier. In the case of privately owned property this is usually to mitigate the costs of maintenance. Thus they will have a positive value, albeit a relatively nominal one, dependent on the size and nature of the property and the visitor numbers attracted. The approach to these should have regard to Section 8 of the main Rating Manual section and paragraph 4.3.2 below.
Basic RVs should start at £1,000 and are often unlikely to exceed £10,000.
4.1.4 Category G – Gardens
Where the hereditament comprises a garden of historic or national interest, it is likely that a trading company would be in occupation of any shop which will therefore be likely to form a separate assessment, possibly including any café or restaurant element. Most heritage gardens will show an operating loss, or at best a nominal trading profit. On the rare occasion when a heritage garden will be commercially viable as an attraction it should be assessed in accordance with paragraph 4.3.1 below. In the absence of any meaningful rental evidence or trading profit it is necessary to look elsewhere for the valuation.
There has been no challenge to the concept that heritage gardens have value and that the assessments should not be nil. This acknowledges that there are operators in the market prepared to pay a rent to occupy a prestigious, albeit loss making, garden. Having regard to wider examples of percentage bids applied to low profitability, or loss making classes, a reasonable expectation would be within the range of 2% - 3% of Fair Maintainable Trade (FMT), gross receipts excluding VAT, dependent on the size, nature and turnover of the individual property.
It will be necessary for the specialist valuer to take a “stand back and look” approach taking into account all the factors affecting the individual property and similar comparable gardens. It is unlikely that a rateable value would be below £1000, with the majority in the range £5,000 - £20,000.
4.1.5 Category H - museum or gallery within an historic property
Properties in this category are extremely rare, valuations should be based on the merits of each case and having regard to the guidance given for museums and art galleries in RM S6: P3: S715.
4.1.6 Category O – Operational Properties
These will fall to be assessed on the local tone for the type of property concerned (e.g. offices, warehouses).
Stage 2 - the second element, additions
4.2 Where there is exhibition/museum space within the hereditament (usually English Heritage and Cadw properties) an addition in the range £500 - £5,000 should be made depending on the size and quality of the space.
The minimum of £500 will be for small museums of excavation finds, e.g. Wall Roman site, and the maximum £5,000 for large exhibition spaces, e.g. Battle Abbey, Whitby Abbey.
An addition for non-separately assessed shops, cafes/tearooms etc. should be made in RV £250 bands being broadly based (rounded) from 2% of FMT, net of VAT:
FMT up to £24,000,addition nil (included in basic £1,000), FMT between £24,000 - £36,000, addition £500 RV, FMT between £36,000 - £48,000, addition £750 RV, FMT between £48,000 - £60,000, addition £1,000 RV and so on.
Car parking: generally this is reflected in the basic RV - an addition should only be made for car parks where a charge is made, due to its position close to a town centre or where used as a car park for walkers etc., which generates income over and above that from visitors to the historic property.
Self-Catering Holiday lets: this is a separate and distinct use therefore such accommodation will typically be separately assessed. Any within the curtilage of a National Trust, English Heritage or Cadw property should be assessed having regard to the local tone for such separately assessed properties and, where located within the historic property itself, to the costs in maintaining that part of the property.
4.3 Exceptions
4.3.1 Commercially viable properties
Where the property is commercially viable the assessment should be arrived at by applying a rental percentage, taken from the range derived from receipts and expenditure analysis, to the adjusted AVD receipts from all sources (excluding VAT) and reflecting the physical circumstances at the material day. Examples may include the English Heritage properties Stonehenge, Tintagel Castle, and Clifford’s Tower.
Any property that is commercially viable, and where the available accounts adjusted into the rating hypothesis produce a commercial level of profit, may also have the resultant RV checked and considered by reference to a full receipts and expenditure valuation. Such cases will be few.
4.3.2 Composite Properties occupied by the owner
These will normally be private historic houses or stately homes. The motivation behind most privately run historic properties, which are primarily used as a home, will be to make a profit to set against the overall running and maintenance costs of the house; these will include long-term cyclical repairs. Therefore, the trading position of the non-domestic use provides the best guide to the rateable value. The guidance in the main rating manual section 8. should be followed.
Usually the principal use is as a residence with the house also being open to the public but there are those where the commercial use dominates, the owner often only retaining a portion of the house. The non-domestic part will be open to the public but will often also be used for functions (including weddings) and/or corporate entertainment, conferences and such like. This may be in conjunction with significant other visitor attractions in the park, tearooms, restaurants etc. Care should be taken in the valuation of these properties to avoid taking into account costs attributable to the domestic occupation, or those of the greater estate.
It is to be expected that the assessments of these properties will normally be in the range of 2% - 5% of gross takings (excluding VAT)from all sources as at the AVD reflecting the physical circumstances at the material day. The rental percentage adopted must adequately reflect the actual physical features and characteristics of the hereditament and the preservation costs required. It follows therefore that Grade I or Grade II* listed properties will generally fall to be considered at the lower end of the rental percentage range.
If the non-domestic activities overwhelm the domestic element then the RV may be more accurately determined by assessing the hereditament as a ‘function venue’. See RM S6:P3: S255.
4.4 Historic Royal Palaces
The historic royal palaces open to the public should be valued in accordance with the above guidelines.
This Appendix has been approved and agreed on behalf of The National Trust and the Historic Houses Association.
Rating list description
Hereditaments within this class should be described as “Historic Property and Premises”. The Scat Code is: 265S. Where only the garden is open to the public and it forms part of a composite hereditament the description should be “Show Gardens and Premises”. Additional facilities should be included as appropriate. Where the garden is itself the attraction and it is neither of national significance nor occupied by the National Trust, English Heritage or Cadw then Scat Code 284 (Leisure Attractions) should be used with a suffix of S or G as appropriate. Guidance on the valuation of gardens may be found in Rating Manual section 6: part 3 - section 1085.
Part A: Privately run composite historic properties
Introduction
A1. The principal use of a privately run composite historic property is likely to be as a home. The rateable value of a composite hereditament is “an amount equal to the rent which, […], would be reasonably attributable to the non-domestic use of property” (paragraph 2(1A) of Schedule 6 to the Local Government Finance Act 1988). The non-domestic use in a privately run composite historic property will, most likely, be undertaken with a view to profit. Therefore, in the absence of rental evidence, the rateable value can be found by reference to the receipts and expenditure in respect of that non-domestic use.
A2. Regard should be had to the general guidance in Rating Manual : Section 4 - Part 2 on the receipts and expenditure method. However, the following points are relevant to this class of property and their nature as composites.
Income
A3. Regard should only be had to income that can be associated with the non-domestic use of the hereditament. This is likely to include:
- admissions,
- retail and catering sales, and
- other corporate activities, providing such use has not been separately assessed.
A4. Revenue grants, legacies and donations that the hypothetical tenant could reasonably expect to receive may be considered provided they are in respect of the non-domestic use. However, most such payments on historic properties, whilst they may carry a condition of the house being open, are made in respect of the domestic use of the property as a home (such as for the property’s maintenance) and should be disregarded.
Expenditure
A5. In line with the treatment of income, regard should only be had to expenditure that can be associated with the non-domestic use of the hereditament. Where the hereditament is primarily a home, as a general rule, any expenditure that would still be incurred in the absence of the non-domestic use should be treated as associated with the domestic use and ignored when considering the value of the non-domestic part. However, where a clearly defined part of the property is primarily in non-domestic use, and that use is not merely incidental to the domestic use of the hereditament, then expenditure on that part may need to be apportioned between the domestic and non-domestic use. This expenditure would include long-term cyclical repairs where appropriate.
Divisible Balance
A6. Taking the wholly non-domestic expenditure from the income should give a divisible balance to be shared between the landlord and the tenant. If a negative divisible balance is produced then it is likely that the reason for opening the property to the public is to satisfy the conditions of a grant or tax relief. In such cases consideration should be given to a nil assessment.
A7. It is likely that the hypothetical tenant would expect a significant percentage of the divisible balance. This is because, whilst much of the expenditure on the hereditament is not related to the non-domestic use, and therefore disregarded in reaching the divisible balance, the tenant is still responsible for the repair of the whole hereditament and would expect to use the profit from the non-domestic use to set against the costs of the domestic use (reflecting the position in real life).
Part B: Historic Properties, not used as a home, which are not capable of being operated for profit
Introduction
B1. In general terms, hereditaments which are not capable of being operated for profit and on which there is no evidence of rents fall to be valued using the contractor’s basis. However, the contractor’s basis will not be suitable for most historic properties. This does not distract from any evidence that a substantive rateable value is still appropriate (see paragraphs 6.4 and 7.3 of Rating Manual : Section 6 - Part 3 : Section 1000) but it does mean that an alternative approach to valuation is needed.
Factors relevant to the hypothetical tenant
B2. In considering their rental bid, the hypothetical tenant would weigh up the benefits that they expect to receive from occupying the hereditament. The motivations behind the occupiers of these types of historic properties (and motivations behind the hypothetical tenants) are matters such as education, heritage, conservation and social and economic benefits. The hypothetical tenant would look at all the relevant information available in judging to what extent the hereditament could meet these benefits. A number of factors would influence the rental bid (all of which should be considered) but one of the most important will be the number of expected visitors. The greater the number of visitors, the more likely it is that objectives such as the preservation of the heritage, education and social and economic benefits can be achieved.
B3. Several factors other than visitor numbers would influence the rent. They include:
- the importance of the property to the occupier (the most likely hypothetical tenant). Most hypothetical tenants will be concerned with the preservation of the physical building and its heritage. The status of the house in this context would, therefore, influence the rental bid,
- the amount and range of accommodation on show. The size of the accommodation being assessed will have less relevance than for other sectors but will still be relevant. A stately home which illustrates a full picture of life in the house would be more valuable to the hypothetical tenant than one which shows only a small aspect, and
- the income and expenditure of the hereditament. No hypothetical tenant will have limitless resources and even though the property will not be occupied for profit, the tenant will still have some regard to the trading position. A particularly high running cost may have a downward pressure on the value within the range whereas a low running cost may have an upward pressure.
B4. The rateable value adopted should have regard to these and any other relevant factors. It is difficult to say whether the hypothetical tenant would charge for entry, although that is likely, so, for consistency, it should be assumed that a charge for entry would be made by the hypothetical tenant. Where there is a membership scheme or a free entry policy it is reasonable to assume that one third of visitors actually entering free would still enter if they had to pay. For example, the visitor numbers at a site with 100% free entry should be reduced by two thirds.
Evidence from other mode or categories of use
B5. Whilst there may be little direct rental evidence for historic properties, there may be other helpful rental evidence in the locality. All relevant evidence may be used in assessing rateable value and it is for the valuer to judge the weight to be given to evidence of rents or assessments of hereditaments in others uses. This may be particularly relevant in a class such as historic properties where there is little direct rental evidence. Regard should be had to Rating Instruction and Advice RAT070801 on the Court of Appeal decision in Williams (VO) v Scottish & Newcastle Retail Ltd and Another 2001 RA 41.
1. Co-ordination Arrangements
Historic Properties (which includes gardens of national importance) are a Specialist Rating Unit (SRU) Class. Responsibility for ensuring effective co-ordination lies with the Specialist Rating Units. For further information see Rating Manual section 6: part 1
The R2010 Special Category Code 265 should be used. As an SRU Class the appropriate suffix letter should be S.
For historic house used as museums reference should be made to Rating Manual section 6: part 3 - section 715 - museums and art galleries. Gardens not of national importance should be Special Category Code 284 (Leisure Attractions) and reference should be made to Rating Manual section 6: part 3 - section 1085.
This guidance will also apply to Royal Palaces Special Category Code 240. As an SRU class the appropriate suffix letter should be S.
2. Background
This class will include properties occupied by English Heritage (EH), Cadw, The National Trust (NT), members of the Historic Houses Association (HHA), charitable trusts, other individuals and organisations. The principal purpose of occupation will be the preservation of the fabric of the building, ruin or garden in an historical context.
In previous lists various schemes have existed for multiple occupiers such as EH, Cadw and NT. There have been varying approaches to the assessment of each of these and charitable trust occupations of historic properties.
In part this discrepancy flows from the unit of assessment, in that
-
EH properties are single assessments covering all aspects of the occupation, regardless of mode or category (by virtue of section s65a, Local Government Finance Act (LGFA), 1988)
-
National Trust and other charitable occupiers frequently have parts occupied by their associated trading companies – commonly shops, restaurants and plant sales. Where a hereditament can be identified which is occupied by a separate legal entity (e.g. a trading company) then this constitutes a separate assessment. National Trust properties commonly have Rateable Value (RV) £Nil assessments reflecting the repairing liability of the large mansion house element and the inalienable nature of the properties, with this assessment usually including the café/restaurant, whilst the shops, occupied by their trading company are separately assessed.
-
Private properties or gardens open to the public are likely to be composite hereditaments occupied by the owner.
-
The majority of other charitable trust occupations currently remain as single assessments but these may be subject to review if a trading company is found to have been created.
Thus with the varying units of assessment it is not currently possible to consider direct “like for like” comparisons between rating assessments of similar properties that happen to be in different occupation.
For the 2005 Rating List EH and Cadw were classified into category types with commercially viable properties being valued on a full receipts and expenditure basis, e.g. Stonehenge, Tintagel and Clifford’s Tower.
| A | No entry charge ("humps & bumps" and sites of small ruins). |
| B | Castle, fort or other ruins, plus admission kiosk. |
| C | Castle, fort or other ruins, including some weather-tight accommodation within the fabric of a building and/or small shop, tearoom or exhibition. |
| D | Castle, fort or other ruins, including substantial new visitor facilities with/without shop or tearoom. |
| E | Industrial monument, Christian heritage, Military and Historic property, either vacant or set out to reflect former use, with/without small shop; tearoom or exhibition. |
| F | Stately home / large historic house with property specific collection |
| G | Garden |
| H | Museum/gallery within historic property |
| O | Operational property – e.g. administrative offices |
3. Valuation Approach for 2010 – Non-composite properties and composites where the owner does not reside in the domestic part.
To ensure correct relativity across the various permutations of occupation/separate assessment, the valuations for R2010 will be built up as two elements using the above categories
a. A value for the historic property or garden alone – which will then allow for easy comparison between sites, and b. An addition to reflect any additional income streams that will be within the same assessment e.g. shop/kiosks/cafes/plant sales or value-significant museum or exhibition space.
3.1 Stage 1 – Historic property or Garden only
3.1.1 Category A
Those properties correctly falling into existing Category A (No entry charge -“humps & bumps” and sites of small ruins) do not satisfy the tenets of rateable occupation and will not require entries in rating lists.
3.1.2 Categories B – E
For loss making properties and those that show only a cyclical, or one-off profitability (such as Beeston, Framlingham):
Minimum value £500 “basic” RV – this will include those sites with, at best, only a small kiosk, hut, “hole in wall ticket sales” etc and WCs
£1,000 “basic” RV – this will include those sites which additionally have some fully serviced accommodation for staff use/ticket sales/admin offices/sales etc.
3.1.3 Category F - large historic houses.
NT properties generally fall to be assessed at Nil RV, following the Court of Appeal decision in Hoare (VO) and Spratling (VO) v The National Trust 1998 RA 391. This decision flows from the agreed concept that National Trust was the only conceivable occupier for these properties and it thus does not follow that similar properties in other occupations should be taken as RV £Nil.
Given the repairing and running costs, rarely, if ever, will such a property produce a commercially viable trading profit. They are open to the public for a variety of reasons, dependent on the nature of the occupier. In the case of privately owned property this is usually to mitigate the costs of maintenance. Thus they will have a positive value, albeit a relatively nominal one, dependent on the size and nature of the property and the visitor numbers attracted. The approach to these should have regard to Appendix 1 to the Rating Manual section.
Basic RVs should start at £1,000 and are unlikely to exceed £10,000.
3.1.4 Category G – Gardens
Other than for any garden operated by EH it is likely that a trading company will occupy any shop and it will form a separate assessment, possibly including a café or restaurant. Most gardens will show an operating loss, or at best a nominal trading profit. On rare occasions a garden will be commercially viable as an attraction and should be assessed in accordance with paragraph 3.3.1 below. In the absence of any meaningful rental evidence or trading profit it is necessary to look elsewhere for the valuation.
There has been no challenge to the concept that gardens have value and that the assessments should not be nil. This acknowledges that there are operators in the market prepared to pay a rent to occupy a prestigious, albeit loss making, garden. Having regard to wider examples of percentage bids applied to low profitability, or loss making classes, a reasonable expectation would be within the range of 2% - 3% of Fair Maintainable Trade (FMT) dependent on the size, nature and turnover of the individual property.
It will be necessary for the valuer to take a “stand back and look” approach taking into account all the factors affecting the individual property and similar comparable gardens. It is unlikely that a rateable value would be below £1000, with the majority in the range £5,000 - £15,000.
3.1.5 Category H
Properties in this category are extremely rare, with valuations to be based on the merits of each case and having regard to RM Section 6 Part 3: S715: Museums and Art Galleries.
3.1.6 Category O – Operational Properties
These will fall to be assessed on the local tone for the type of property concerned (e.g. offices, warehouses), in most cases by local offices.
3.2 Stage 2 - additions
Where there is exhibition/museum space within the hereditament (usually EH and Cadw properties) an addition for this depending on size and quality should be made in the range
£500 - £5,000. The minimum of £500 will be for small museums of excavation finds, e.g. Wall Roman site, and the maximum £5,000 for large exhibition spaces, e.g. Battle Abbey, Whitby Abbey.
Addition for shops and non-separately assessed tearooms etc – to be taken in RV £250 bands broadly based (rounded) from 2% of fair maintainable trade, net of VAT
Up to £24,000 t/o nil (included in basic £1,000),
£24,000 - £36,000 t/o - £500 RV,
£36,000 - £48,000 t/o - £750 RV,
£48,000 - £60,000 t/o - £1,000 RV and so on
Car parking – generally this is reflected in the basic RV - an addition should only be made for car parks where a charge is made, due to its position close to a town centre or where used as a car park for walkers etc, which generates income over and above that from visitors to the historic property.
Self Catering Holiday lets will usually be a separate and distinct use and will typically therefore be separately assessed. Any within the curtilage of an EH or Cadw property should be included in a single assessment with the historic property in accordance with s65a, LGFA 1988; regard should be had to the local tone for such separately assessed properties and to the costs in maintaining the historic property.
3.3 Exceptions
3.3.1 Commercially Viable Properties
Any property that is commercially viable (i.e. where the accounts adjusted into the rating hypothesis produce a commercial level of profit) should be calculated by reference to a full receipts and expenditure valuation. English Heritage examples include Stonehenge, Tintagel, and Clifford’s Tower.
In the case of Heligan Manor Gardens (Lost Gardens of Heligan) the agreed RV £225,000 represents 7.5% of FMT and is supported by the rent passing.
3.3.2 Composite Properties occupied by the owner
These will normally be historic houses or stately homes. The motivation behind most privately run historic properties, which are primarily used as a home, will be to make a profit to set against the overall running and maintenance costs of the house; these will include long-term cyclical repairs. Therefore, the trading position of the non-domestic use provides the best guide to the rateable value. The guidance in the main rating manual section and appendix 1 to it should be followed.
Usually the principal use is as a residence with the house also being open to the public but there are those (usually large stately homes) where the commercial use dominates, the owner often only retaining a relatively small flat or portion of the house. The non-domestic part will be open to the public but also it will be used for functions and/or corporate entertainment, conferences. This may be in conjunction with significant other visitor attractions in the park, tearooms, restaurants etc. Care should be taken in the valuation of these properties to avoid taking into account costs attributable to the domestic occupation, or those of the greater estate. It is to be expected that the assessments of these properties will normally be in the range of 2.5 to 5% of gross takings from all sources.
4. Historic royal palaces
The historic royal palaces open to the public should be valued in accordance with the above guidelines.
5. IT support
The development a new facility on the Non Bulk Server (NBS) should enable input of factual data to achieve valuations that follow the recommended approach for historic properties. All valuations should be entered onto the NBS under the relevant Scat Code