HMRC: Contractor's Basis Land Valuation Guidance

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version. 1.1 The land values to be used for the purposes of contractor’s basis valuations have been assessed by the Valuation Office’s Property Services team. 1.4 Appendix 1 containing the data is self-explanatory, but in summary there are 5 main categories of land including: 1.6 The categories of land are broken down regionally and in some cases (for example industrial) to Billing Authority ( BA ) level, see Appendix 1. There are 6 distinct regions in London identified, with North and South separated by the River Thames. The ‘region index’ in Appendix 1 provides a look-up table for determining which BA falls into which region. 1.7 Residential values for some beacon towns and cities within a region (see the ‘Resi BA and Town Index’ tab in Appendix 1 for details) have been considered and an indicative value for each region determined. 1.8 Regional industrial values represent an indicative value for each region. 1.9 Following the change in method of valuation for Civil Airports, individual ‘non-civil’ airports, plus General Aviation airports/airfields and small club airfields have been singularly identified and valued at the bottom of Appendix 1, see ‘airports index’ tab in Appendix 1 for more details. 1.11 Each value is based on a one hectare take of average density, in an average location within the relevant BA or region, with no abnormal development costs. 1.13 The figures shown in Appendix 1 outside of London assume the construction of semi-detached houses in the suburbs, and that planning consent is in place which fully complies with affordable housing requirements. Note that the percentage of affordable housing required (and the tenure mix) impacts on the concluded land value. This can result in towns/cities with similar base values having significantly different land values where one has a higher affordable housing requirement. It can also create apparent anomalies, for example, where apparently more valuable locations have lower land values due to their specific, possibly more onerous, planning policies at the antecedent valuation date. 1.14 For the London areas residual valuations based on a higher density of development appropriate for each location have been completed. 1.15 Rating is concerned with market value which means it is appropriate to reflect any factors that affect this; affordable housing planning policies being one such factor. 1.16 The regional indicative values less 20% (RS less 20% column) should be used where the prevailing land use is residential. 1.17 The 20% discount is applied following the leading case of Dawkins (VO) v Royal Leamington Spa BC and Warwickshire CC [1961] RVR 291 (see Rating Manual Part 3: The Contractor’s basis of valuation). 1.19 In most central and fringe areas residential and commercial land use are in competition. Residual residential valuations reflecting the higher density of dwelling units in more central areas have been completed for beacon towns and cities in each region. These values reflect the likely density of development and reflect any factors that affect this such as affordable housing provision. These beacons will provide a guide and interpolation will be necessary using valuer judgement. 1.21 The figures shown are based on secondary locations and do not reflect prime sites such as those with motorway links. 1.22 For classes of property within the industrial mode or category the Industrial levels should be taken from Appendix 1 Where exceptionally the hereditament is of a mode or category where Practice Note advice for the class states that a discounted industrial land value is to be adopted then the indicative discounted value in Appendix 1 should be applied. 1.24 Amenity values are adopted as the developed land value for certain classes due to their location. Practice notes for property classes will provide guidance. Amenity values a