4.1The class can be difficult to fit into a category, and full factual information will be needed as to the nature of occupation of the premises, the nature of the business carried on and the identification of the relevant person mentioned in the legislation.
The law S66 LGFA paragraph 2B
4.2Section 66 defines what is and is not domestic property. Para 2B states:
A building or self-contained part of a building is not domestic property if:
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the relevant person intends that, in the year beginning with the end of the day in relation to which the question is being considered, the whole of the building or self-contained part will be available for letting commercially, as self-catering accommodation, for short periods totalling 140 days or more, and
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on that day his interest in the building or part is such as to enable him to let it for such periods.
The situation in Wales differs in as far as TheNon-Domestic Rating(Definition of Domestic Property) (Wales) Order 2010 amends section 66 of the Local Government Finance Act 1988 so that in Wales - from 1 April 2010 for a furnished property to be assessed fornon-domestic ratingpurposes as opposed to council tax it must meet the following conditions:
i) for the 12 months prior to assessment -
a) it must be available for commercial letting to the public for periods which amount, in aggregate, to not less than 140 days;
b) the periods for which it is so let amount, in aggregate, to at least 70 days; and
ii) for a period comprising at least 12 months following the assessment, it must be available for commercial letting to the public for periods which amount, in aggregate, to not less than 140 days.
The approach therefore is similar to the existing approach adopted in England but with the additional requirement to consider both the 12 months prior to assessment and the periods for which the premises are let total at least 70 days.
Application
4.3Whilst the law is applicable to holiday flats and cottages let commercially whether in blocks or individually, it will also sweep up serviced apartments under the same principles. An apartment, or block of apartments, let out commercially for short periods (28 days or less) in the course of a business, will fall under this non-domestic provision, and will therefore be included as an entry in therating list. In Wales application of the law is outlined in the Rating Manual Section 480: holiday accommodation (self-catering) paragraph 5.4.
Short period
4.4Where a single apartment is clearly not let for a short period, but a longer-term arrangement is in place, then this will fall to be banded for CT if it is let to an individual(s) and is their permanent residence. The definition of short period is not defined anywhere in the legislation, but the VTE decision Bridge Street Limited and Room Space Limited v David Jackson (VO) and Andrew Ricketts (VO) (28 November 2017) provided clarification and certainty as to what constitutes short periods in relation to the legislation.
4.5This particular case concerned whether the hereditaments in question were non-domestic, and so subject to business rates, or domestic dwellings subject to Council Tax. The hereditaments had been included in therating listas serviced apartments but the appellants contended that short periods referred to in the Act should constitute 28 days or less and not one day less than six months as proposed by the respondent Valuation Officer and therefore subject to Council Tax.
4.6The VT President determined that short periods for the purpose of S.66 (2B) of the Local Government Finance Act 1988 was 28 days or less. It should also be reiterated that paragraph 2B(a) of the Act states intention of the relevant person is to be analysed and this is noted in the VT decision.
4.7The Upper Tribunal decision in Godfrey & Godfrey v. Simm (VO) RA/15/1999 provides clarification with regards intent. In this case the appellants intention was to advertise the property throughout the year for holiday letting at any time but not to grant lettings for periods exceeding 139 days in any year.
The decision stated If on the material day a would-be tenant had approached the owners with an application to take the property for a fortnight in each of the twelve months of the year, he would have been refused on the ground that they were not willing to let for short periods totalling 140 days or more.
In essence in this case the property was not available for short periods which totalled 139 days and as such the appeal was allowed and theRating Listamended to delete the NDR entry.
4.8Before agreeing to delete an existingrating listentry or deciding not to make a new entry, Valuers should expect to see some evidence that a conscious decision has been made to limit the bookings accepted. For example, Mr Godfrey was able to demonstrat
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