Today's Supreme Court decision in Woolway v Mazars clarifies the way in which different floors of an office building are to be treated for the purposes of rating assessments. Non-domestic rates are a tax on property, and not on persons or businesses. The heriditament is the unit of assessment. Each heriditament is separately identified in the ratings list and separately assessed.
The question before the Supreme Court was how different floors in an office building should be assessed when occupied by the same party. Owing to the common occupier should the separate floors form one heriditament?
The ordinary practice of valuers has been to treat different parts of a building as a single heriditament if they are located together, but as separate heriditaments if they are not. For example, if a company occupied floors one and two of a building, these would be treated as one heriditament. However if they occupied floors one and three, the two floors would be separate heriditaments and, thus, separately assessed for rating purposes.
Mazars occupied the second and sixth floors of an office building. According to normal valuation practice, the two floors would be assessed separately for rating purposes. However, the third, fourth and fifth floors of the same building, which were occupied by another business, were treated as one heriditament.
In looking at how separate floors should be assessed, the Supreme Court has provided some welcome clarity:
Following the case it is clear that the practice of valuers to assess floors of a building which are not contiguous as separate heriditaments should continue. Whilst the court did not have to decide on the treatment of sequential floors in a building, both Lord Gill and Lord Neuberger were of the view that, if access to the different floors had to be achieved via common parts, they, too, would constitute separate heriditaments. This should provide welcome clarity to valuers and brings the position in England and Wales in line with that in Scotland.
Contibutor: Alexandra Holsgrove Jones
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