Annual Tax on Enveloped Dwellings: work out the value of my property
Find out how to work out the value of your property and get information about Pre-Return Banding Checks.
You need to know the value of your property to find out if it falls within the scope of Annual Tax on Enveloped Dwellings (ATED).
When you know the value of your property you can work out what property value band it falls into. This will tell you whether you need to pay ATED and how much you need to pay each year.
If you need help in working out how much ATED you need to pay, you may be able to ask HMRC for a Pre-Return Banding Check (PRBC).
How to value your property
You can work out the value yourself or you can use a professional valuer.
Valuations must be on an open-market willing buyer, willing seller basis and be a specific amount.
The valuation date you need to use depends on when you owned the property.
Property owned on or before 1 April 2012
You should use the value at 1 April 2012 and this is generally set for the next 5 chargeable periods beginning on 1 April 2013.
You’ll need to revalue your property at 5 yearly intervals, for example at 1 April 2017 to cover ATED returns for the next 5 chargeable periods starting 1 April 2018.
Property owned after 1 April 2012
You should use the value at the date you bought or acquired it.
If your property is a new build or you’ve altered it to become a new dwelling you should use the earliest of the date it was:
- first occupied
- entered on the Council Tax Valuation Lists (or Northern Ireland Valuation List)
Changes in valuation
The valuation could change if circumstances change, for example if your property is developed or converted or falls outside of ATED completely or moves back in again.
HM Revenue and Customs (HMRC) can challenge your valuation. If we find that it’s wrong, we can charge penalties and interest.
Find more about valuing your property in section 9 of the ATED technical guidance.
How to value different types of properties and multiple interests
If your property is mixed-use, for example residential and non-residential you only need to value the residential part.
Properties with more than one dwelling
If your property consists of self-contained flats, each flat will be a dwelling and will be valued separately.
Your property may be valued as a single dwelling if:
- it has more than one dwelling, they’re each owned by a company or someone connected to the company and there’s internal access between them
- it consists of adjoining buildings with internal access – for example 2 terrace houses
Find out more in section 23 of the ATED technical guidance.
Multiple interests held in the same dwelling
Multiple interests in your dwelling, for example a freehold and a leasehold interest, are aggreated and your property valued as a single dwelling interest if they’re held by:
- the same person
- connected persons
However where one of the connected persons is an individual the property is only valued as a single dwelling interest if:
- the property value is more than £2 million and the company’s interest is worth more than £500,000
- the property value is less than £2 million and the company’s interest is worth more than £250,000
Find out more in sections 15 and 16 of the ATED technical guidance.
Pre-return banding check
If you’re not sure which value band your property falls into, you may be able to ask HMRC for a Pre-Return Banding Check (PRBC).
You can ask for one if:
- you’re not due a relief that will reduce your ATED charge to nil
- your property valuation falls within 10% of a banding threshold
The 10% banding thresholds are:
|2014 to 2015||2015 to 2016|
|£900,000 to £1.1 million||£450,000 to £550,000|
|£1.8 to £2.2 million||£900,000 to £1.1 million|
|£4.5 to £5.5 million||£1.8 to £2.2 million|
|£9 to £11 million||£4.5 to £5.5 million|
|£18 to £22 million||£9 to £11 million|
|-||£18 to £22 million|
How to apply for a PRBC and what happens next
You’ll get an acknowledgement and a reference number that you should include on your return or any letters you send about PRBC.
Normally within 30 working days of receiving your PRBC form HMRC will:
- agree the banding you’ve chosen is the right one
- ask you for more information to help make a decision
- tell you we don’t agree with your value banding and let you know what the right banding should be
- tell you if we need to look at the inside of the building to complete our check
During busy times, like the lead up to the peak filing and payment deadline, we might take longer to reply.
We’ll normally accept valuations prepared by a professional property valuer but we might enquire into any later returns and challenge valuations in them.
If you don’t get your PRBC in time to submit your return
If you think you might need to pay ATED, send your return and payment of tax using the banding you think is right. HMRC may decide to open an enquiry into your return so we can consider the appropriate banding for your property.
If you get your PRBC after you’ve sent in your return and HMRC don’t agree with your valuation, you’ll need to complete an amended return.
If you don’t agree with HMRC’s PRBC
If your estimate of the property value means you’re due to pay tax, you should submit your return using your valuation. We may decide to open an enquiry into your return and we’ll look at the appropriate banding for your property again.
If you don’t think you need to pay ATED because your property is below the ATED valuation threshold, we may issue a ‘determination’. This is an estimate of what we think you owe based on our valuation of your property and we’ll ask you for payment.
You can appeal against the determination if you don’t agree with it but you can’t appeal against the PRBC.
If you need any help you can call the ATED helpline.
Published: 3 March 2014
Updated: 24 August 2015
- This guide has been reviewed and updated to reflect recent process changes and the introduction of the new Relief Declaration Return.
- First published.