Local Government Finance Act 1988

2 (1) The rateable value of a non-domestic hereditament [F1 none of which consists of domestic property and none of which is exempt from local non domestic rating] shall be taken to be an amount equal to the rent at which it is estimated the hereditament might reasonably be expected to let from year to year [F2 on these three assumptions—. E+W

(a) the first assumption is that the tenancy begins on the day by reference to which the determination is to be made;

(b) the second assumption is that immediately before the tenancy begins the hereditament is in a state of reasonable repair, but excluding from this assumption any repairs which a reasonable landlord would consider uneconomic;

(c) the third assumption is that the tenant undertakes to pay all usual tenant’s rates and taxes and to bear the cost of the repairs and insurance and the other expenses (if any) necessary to maintain the hereditament in a state to command the rent mentioned above.]

[F3 (1A) The rateable value of a composite hereditament none of which is exempt from local non-domestic rating shall be taken to be an amount equal to the rent which, assuming such a letting of the hereditament as is required to be assumed for the purposes of sub-paragraph (1) above, would reasonably be attributable to the non-domestic use of property.

(1B) The rateable value of a non-domestic hereditament which is partially exempt from local non-domestic rating shall be taken to be an amount equal to the rent which, assuming such a letting of the hereditament as is required to be assumed for the purposes of sub-paragraph (1) above, would, as regards the part of the hereditament which is not exempt from local non-domestic rating, be reasonably attributable to the non-domestic use of property.]

(2) Where (apart from this sub-paragraph) the rateable value would include a fraction of a pound—

(a) the fraction shall be made up to one pound if it would exceed 50p, and

(b) the fraction shall be ignored if it would be 50p or less.

(3) Where the rateable value is determined for the purposes of compiling a list the day by reference to which the determination is to be made is—

(a) the day on which the list must be compiled, or

(b) such day preceding that day as may be specified by the Secretary of State by order in relation to the list.

(4) Where the rateable value is determined with a view to making an alteration to a list which has been compiled (whether or not it is still in force) the day by reference to which the determination is to be made is—

(a) the day on which the list came into force, or

(b) if a day was specified under sub-paragraph (3)(b) above in relation to the list, the day so specified.

(5) Where the rateable value is determined for the purposes of compiling a list by reference to a day specified under sub-paragraph (3)(b) above, the matters mentioned in sub-paragraph (7) below shall be taken to be as they are assumed to be on the day on which the list must be compiled [F4 (but this is subject to paragraph 2ZA)].

(6) Where the rateable value is determined with a view to making an alteration to a list which has been compiled (whether or not it is still in force) the matters mentioned in sub-paragraph (7) below shall be taken to be as they are assumed to be on the [F5 material day [F6 (but this is subject to paragraph 2ZA)].]

F7 [(6A) For the purposes of sub-paragraph (6) above the material day shall be such day as is determined in accordance with rules prescribed by regulations made by the Secretary of State.]

(7) The matters are—

[F8 (a) matters affecting the physical state of the hereditament,

(aa) matters affecting the physical enjoyment of the hereditament,]

(b) the mode or category of occupation of the hereditament,

(c) the quantity of minerals or other substances in or extracted from the hereditament,

[F9 (cc) the quantity of refuse or waste material which is brought onto and permanently deposited on the hereditament,]

[F10 (d) matters affecting the physical state of the locality in which the hereditament is situated,

(da) matters which, though not affecting the physical state of the locality in which the hereditament is situated, are nonetheless physically manifest there, and]

(e) the use or occupation of other premises situated in the locality of the hereditament.

(8) The Secretary of State may make regulations providing that, in applying the preceding provisions of this paragraph in relation to a hereditament of a prescribed [F11 class], prescribed assumptions (as to the hereditament or otherwise) are to be made.

[F12 (8A) For the purposes of this paragraph the state of repair of a hereditament at any time relevant for the purposes of a list shall be assumed to be the state of repair in which, under sub-paragraph (1) above, it is assumed to be immediately before the assumed tenancy begins.]

(9) The Secretary of State may make regulations providing that in arriving at an amount under sub-paragraph (1) [F13 , (1A) or (1B)] above prescribed principles are to be applied; and the regulations may include provision for the preservation of such principles, privileges, and provisions for the making of valuations on exceptional principles, as apply or applied for the purposes of the 1967 Act.

(10) If a day is specified under sub-paragraph (3)(b) above the same specification must be made in relation to all lists to be compiled on the same day.

[F14 (11) For the purposes of sub-paragraph (8) above a class may be prescribed by reference to such factors as the Secretary of State sees fit.

(12) Without prejudice to the generality of sub-paragraph (11) above, a class may be prescribed by reference to one or more of the following factors—

(a) the physical characteristics of hereditaments;

(b) the fact that hereditaments are unoccupied or are occupied for prescribed purposes or by persons of prescribed descriptions.

(13) In this paragraph references to the non-domestic use of property are references to use otherwise than in such a manner as to constitute the property domestic property.]

Textual Amendments

F1 Words inserted by Local Government and Housing Act 1989 (c. 42, SIF 81:1), s. 139, Sch. 5 para. 38(3)

F2 Words and para. 2(1)(a)(b)(c) substituted for words in Sch. 6 para. 2(1) (26.5.1999 effective retrospectively on 1.6.1990 as mentioned in s. 2(2) of the amending Act) by 1999 c. 6, s. 1(1)(2)

F3 Sch. 6 para. 2(1A)(1B) inserted by Local Government and Housing Act 1989 (c. 42, SIF 81:1), s. 139, Sch. 5 para. 38(4)

F4 Words in Sch. 6 para. 2(5) inserted (26.10.2023) by Non-Domestic Rating Act 2023 (c. 53), ss. 14(1)(a), 19(1)(a)

F5 Words substituted by Local Government and Housing Act 1989 (c. 42, SIF 81:1), s. 139, Sch. 5 para. 38(5)

F6 Words in Sch. 6 para. 2(6) inserted (26.10.2023) by Non-Domestic Rating Act 2023 (c. 53), ss. 14(1)(b), 19(1)(a)

F7 Sch. 6 para. 2(6A) (which was inserted by 1989 c. 42, s. 139, Sch. 5 para. 38(6)) substituted (7.3.1992 so far as it enables provision to be made by regulations and 1.4.1992 otherwise) by 1992 c. 14, s. 104, Sch. 10 Pt. I para. 4 (with s. 118(1)(2)(4)); S.I. 1992/473, arts. 2, 3

F8 Sch. 6 para. 2(7)(a)(aa) substituted for Sch. 6 para. 2(7)(a) (26.10.2023) by Non-Domestic Rating Act 2023 (c. 53), ss. 14(1)(c)(i), 19(1)(a)

F9 Sch. 6 para. 2(cc) inserted by Local Government and Housing Act 1989 (c. 42, SIF 81:1), s. 139, Sch. 5 para. 38(7)

F10 Sch. 6 para. 2(7)(d)(da) substituted for Sch. 6 para. 2(7)(d) (26.10.2023) by Non-Domestic Rating Act 2023 (c. 53), ss. 14(1)(c)(ii), 19(1)(a)

F11 Word substituted by Local Government and Housing Act 1989 (c. 42, SIF 81:1), s. 139, Sch. 5 para. 38(8)

F12 Sch. 6 para. 2(8A) inserted (26.5.1999 effective retrospectively on 1.6.1990 as mentioned in s. 2(2) of the amending Act (but subject to exception in s. 2(3) of the amending Act) by 1999 c. 6, ss. 1(1)(3), 2

F13 Words inserted by Local Government and Housing Act 1989 (c. 42, SIF 81:1), s. 139, Sch. 5 para. 38(9)

F14 Sch. 6 para. 2(11)–(13) inserted by Local Government and Housing Act 1989 (c. 42, SIF 81:1), s. 139, Sch. 5 para. 38(10)

Modifications etc. (not altering text)

C1 Sch. 6 para. 2 excluded by S.I. 1989/2472, art. 3(1) and by S.I. 1989/2474, art. 4(1) (which S.I. 1989/2474 was revoked (1.4.1995) by S.I. 1994/3282, art. 4(1) (with saving in art. 4(2))

Sch. 6 paras. 2-2C excluded (E.) (31.3.2000) by S.I. 2000/951, art. 4(1)

Sch. 6 paras. 2-2C excluded (E.) (31.3.2000) by S.I. 2000/952, art. 5

Sch. 6 paras. 2-2C excluded (W.) (1.4.2000) by S.I. 2000/948, art. 4(1)

Sch. 6 paras. 2-2B excluded (W.) (1.4.2000) by S.I. 2000/352, art. 3

Sch. 6 paras. 2-2B excluded (W.) (1.4.2000) by S.I. 2000/299, art. 5

Sch. 6 paras. 2-2C excluded (E.) (31.3.2000) by S.I. 2000/946, art. 3

Sch. 6 paras. 2-2C excluded (E.) (31.3.2000) by S.I. 2000/949, art. 4

Sch. 6 paras. 2-2C excluded (E.) (31.3.2000) by S.I. 2000/950, art. 4

Sch. 6 paras. 2-2C excluded (E.) (31.3.2000) by S.I. 2000/947, art. 6

Sch. 6 paras. 2-2B excluded (W.) (1.4.2000) by S.I. 2000/1163, arts. 6, 8

C2 Sch. 6 para. 2 excluded (21.12.1994) by S.I. 1994/3282, arts. 6, 8

Sch. 6 para. 2 excluded (21.12.1994) by S.I. 1994/3283, art. 5

Sch. 6 para. 2 excluded (21.12.1994) by S.I. 1994/3284, art. 5

Sch. 6 para. 2 excluded (21.12.1994) by S.I. 1994/3285, art. 5

C3 Sch. 6 para. 2(1) amended by S.I. 1989/2303, art. 3

C4 Sch. 6 para. 2(1) modified by S.I. 1989/2303, art. 4(2)(3)

C5 Sch. 6 para. 2(1)–(7) modified by S.I. 1989/2303, art. 4(1); S.I. 1989/441, art. 2.

Sch. 6 para. 2(1)-(7) modified (20. 3. 1991) by S.I. 1991/278, art. 2

Sch. 6 para. 2(1)-(7) amended (E.) (1.4.2000) by S.I. 2000/540, art. 2

Sch. 6 paras. 2(1)-(7) amended (W.) (1.4.2000) by S.I. 2000/1097, art. 2

C6 Sch. 6 para. 2(1)-(7) modified (E.) (25.3.2021 at 4:00 p.m.) by The Valuation for Rating (Coronavirus) (England) Regulations 2021 (S.I. 2021/398), regs. 1(1), 2(2)

C7 Sch. 6 para. 2(1A)(1B) amended by S.I. 1989/2303, art. 3

C8 Sch. 6 para. 2(1A)(1B) modified by S.I. 1989/2303, art. 4(2)(3)

C9 Sch. 6 para. 2(6) modified (3. 4. 1991) by S.I. 1991/471, art. 6(2)(3)(b)(i)

C10 Sch. 6 para. 2(7) modified by S.I. 1990/582, reg. 5(2)