Domestic Revaluation and Capital Valuation FAQ
What the changes areWe have made two main changes. We have carried out a revaluation of all properties to restore fairness and make sure everyone pays rates in line with an up-to date value of their house. We have based your rates bill on the capital value of your home. This means it is easier for you to see and understand how we worked out your rates bill. What is capital value?Capital value is the amount your property could reasonably have sold for on the open market on 1 January 2005. We use this date to make sure that all values are consistent. In assessing this value we use information on the sale prices of houses in your neighbourhood. We also make some assumptions to keep the capital values fair; for example, we assume that properties have the same standard of kitchen and bathroom for their age, type of property and location. Why the system has changedThe old way of working out your rates was based on how much it would have cost to rent your home 30 years ago. The amount you paid in rates compared to other people was based on the rental value of your house compared to the rental values of other houses. Changes in the economy over the last 30 years meant that some households were paying a larger share and others were paying a smaller share than they should. We believed that this was unfair and was something we needed to change.
Computer Assisted Mass Appraisal (CAMA )- Questions and AnswersHow were capital values assessed?Assessed Capital Values are based on property market sales. Between 2002 and 2005 we inspected domestic properties that sold on the open market. Statistical analysis of the sales information determined which property characteristics are important and how important they are in explaining sale price. In this analysis sale prices were time adjusted to reflect what price properties would have sold for on 1 January 2005, the valuation date as set in legislation. CAMA ‘models’ were produced for 25 Market Areas identified across Northern Ireland. Each model represented a formula, which explained the relationship between sale price and property characteristics for that locality. Preliminary estimates of capital value were produced by applying the characteristics of each property in each Market Area to the appropriate model. All values thus produced were reviewed, and amended if necessary, by locally based experienced valuation staff, who took into account market evidence and the relativity of assessments. What is CAMA? Computer assisted mass appraisal (CAMA) is the world recognized standard approach to mass valuation exercises, and is used to produce first pass estimates of capital value for property taxation purposes. What property characteristics are important in explaining sale price? Our analysis indicated that the majority of sale prices can be explained by the interaction of the following property characteristics, the most important of which is habitable space (ie size): Habitable Space (m2) Ancillary Space (m2) Outbuildings Size (m2) Primary Classification (Public/Private Build) Sub-classification (Detached, Semi-detached, terrace) Grade of construction Age Band No. of Storeys Heating Sewerage Provision Water Provision Power Provision External Repair Garage Site Positive Features Site Negative Features Neighbourhood Location (Rural, Urban, Suburban) Access Type Was all domestic property valued in this way? No, some classes of residential property, for example apartments, the domestic element of a mixed property, the domestic accommodation in religious institutions etc, for various reasons were considered unsuitable for CAMA and were valued by the traditional ‘manual’ approach. These amounted to about 10% of the total number of domestic properties. Does revaluation and the move from rental to capital value mean my rates bill has gone up?Not necessarily. Revaluation has redistributed rate liability in line with capital values at 1 January 2005. So, if your house is in an area where rental values were high 30 years ago, but where capital values are now below average, you could see a reduction in how much you pay compared to others. On the other hand, if your house had a low rental value 30 years ago, but is in an area where property prices are now high, your rates could increase. The move from rental value to capital value has resulted in a reduction in the combined rate in the pound used to work out your rates bill. For example in the rates year 2006/2007 we worked out your rates bill by multiplying every £1 of rental value by, on average, 350p. Your capital value will now be multiplied by, on average, just over 1/2 p. If my rates have gone up because of the revaluation, is there any help available?Over the first three years of the new system we will gradually introduce the increases for people who are most affected by the changes (this is called transitional relief). People on low incomes will be able to continue to claim Housing Benefit to cover all or part of their rates bill. There is also a new rate relief scheme for people whose income is just beyond the current limits for Housing Benefit. I think the capital value of my home is wrong. What can I do?If you think the capital value of your home is wrong, you should contact us:
We will check your valuation again and let you know the outcome. You must still pay your rates while you are waiting for a decision. What if I am still not satisfied?If you are still not satisfied you can appeal to the Commissioner of Valuation. You can make a further appeal to the Northern Ireland Valuation Tribunal if necessary. You must still pay your rates even if you have not heard the outcome of your appeal. If your rates are reduced as a result of your appeal, we will refund any amount overpaid, along with interest. |
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