The House considered the statutory principle of valuation for rating purposes: ‘But one excludes human realities to a limited and necessary extent, since it is only the human realities that give any value at all to hereditaments. They are excluded in so far as they are accidental to the letting of a hereditament. They are acknowledged so far as they are essential to the hereditament itself. It is, for instance, essential to the hereditament itself that it is close to the sea and that humans will pay more highly for a house close to the sea. One can therefore take that into account in the hypothetical letting. It is, however, accidental to the house that its owner was shrewd or that the rich man happened to want it and that therefore the rent being paid is extremely high’
and ‘Rating seeks a standard by which every hereditament in this country can be measured in relation to every other hereditament. It is not seeking to establish the true value of any particular hereditament, but rather its value in comparison with the respective values of the rest. Out of various possible standards of comparison it has chosen the annual letting value . . So one must assume a hypothetical letting (which in many cases would never in fact occur) in order to do the best one can to form some estimate of what value should be attributed to a hereditament on the universal standard, namely a letting ‘from year to year.’ But one only excludes the human realities to a limited and necessary extent, since it is only the human realities that give any value at all to hereditaments. They are excluded in so far as they are accidental to the letting of a hereditament. They are acknowledged in so far as they are essential to the hereditament itself.’
Lord Wilberforce described the reality principle: ‘The principle that the property must be valued as it exists at the relevant date is an old one . . The principle was mainly devised to meet, and it does deal with, an obvious type of case where the character or condition of the property either has undergone a change or is about to do so: thus a house in course of construction cannot be rated: nor can a building be rated by reference to changes which might be made in it either as to its structure or its use.’
Judges:
Lord Pearce, Lord Wilberforce
Citations:
[1969] 2 AC 366
Jurisdiction:
England and Wales
Cited by:
Cited – Orange PCS v Alan Roy Bradford (Valuation Officer) CA 17-Feb-2004
The claimant challenged the rating of the land it had used for the erection of a mobile ohone mast.
Held: Even though the company had the statutory right to place a mast in this location and without payment, for rating purposes the officer . .
Cited – Newbigin (Valuation Officer) v SJ and J Monk (A Firm) SC 1-Mar-2017
The court was asked: ‘Does a commercial building which is in the course of redevelopment have to be valued for the purposes of rating as if it were still a useable office? ‘
Held: Appeal from decision of CA granted. On the facts found by the . .
Cited – Telereal Trillium v Hewitt (Valuation Officer) SC 15-May-2019
The court considered correct approach to determination of the rateable value of an office building, in circumstances where the evidence showed at the relevant time a general demand in the area for comparable office buildings, but no actual tenant . .
Lists of cited by and citing cases may be incomplete.
Rating
Updated: 06 February 2022; Ref: scu.193771