Rating Assessments

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 9th March 1965.

Alert me about debates like this

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing 12:00 am, 9th March 1965

asked the Chancellor of the Exchequer what steps he proposes to take to ensure that all forms of residential property are valued on a comparative basis for rating purposes.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

All forms of residential property are required by law to be assessed on the same basis, namely the rent which the property may reasonably be expected to fetch.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

Is the hon. and learned Gentleman aware that, as a result of recent decisions by the Lands Tribunal, the link between different forms of residential property is becoming extremely tenuous? Does he agree that the only evidence allowed normally is in respect of the same sort of residential property and that it only extends to a general comparison if the first kind of evidence is not adequate? Is the hon. and learned Gentleman aware that the evidence for flats which is taken into account in my constituency does not take due regard of the fact that 600 or more flats are unoccupied?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

I do not think that there is anything new in the decisions of the Lands Tribunal. They merely confirm what has long been recognised to be the basis of assessment. This basis is being considered in the Government's review of local government finance, including the rating system.

Photo of Mr Julian Ridsdale Mr Julian Ridsdale , Harwich

Can the hon. and learned Gentleman say when that review will be completed?

Photo of Mr Geoffrey Rhodes Mr Geoffrey Rhodes , Newcastle upon Tyne East

Is my hon. and learned Friend convinced that there are no discrepancies between different regions in the valuation of property?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

The object of bringing rating assessments under the Inland Revenue Department was to obtain greater uniformity between regions. This is not easy to achieve, but generally the Department is satisfied that it is achieving it, and the results of appeals to the Lands Tribunal would seem to confirm that.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

asked the Chancellor of the Exchequer whether, in view of the fact that the capital value of a property reflects the discounted value of its future rents, he will take steps to allow selling prices to be used as a check on estimates of notional rents calculated for valuation purposes.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

No, Sir; the law requires rating assessments to be based on the rental value of the property, and not on its capital value.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

Would the hon. and learned Gentleman consider making this sort of comparison in the review into the rating system which is taking place in view of the discrepancies between the ratios of selling price and the notional rent?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

Yes, Sir. That will be considered in the review.

Photo of Mr Edmund Dell Mr Edmund Dell , Birkenhead

Is it not true that if the basis suggested by the hon. Member for Worthing (Mr. Higgins) were adopted it would result in the rating system being a great deal less regressive than it is at the moment?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

Yes, but the argument the other way, which is sometimes ignored, is that capital values are very often an unreliable guide to rental values and would not necessarily themselves be a satisfactory basis either.