Rating Manual section 6 part 3: valuation of all property classes

Section 1006: stables and loose boxes

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Introduction

The purpose of this Section is to provide a guide to the valuation of this type of hereditament for rating purposes and to alert caseworkers to the various, sometimes complex, legal nuances that affect this class.

The distinction between a stable and a loose box is a fine one. The Concise Oxford English Dictionary defines a stable as a “building set apart and adapted for lodging and feeding horses” and a loose box for a horse as a “compartment in a stable in which it can move about”. However, for the broad purposes of this Section, the term Stables & Loose Boxes includes any building used for the housing of horses or ponies, of any description, kept for personal use. In this context, typical uses will include hacking, showing, driving, hunting, dressage, show jumping and eventing.

As a class, Stables & Loose Boxes, need be distinguished from other equestrian users, eg Stud Farms, Racing Stables & Racing Yards or Riding Schools & Livery Stables, which are considered in their own respective Sections of the Rating Manual.

This Section should be read in conjunction with the appropriate Revaluation Practice Note.

To assist referencers during their inspections, an aide memoir has been produced as Appendix 1 to this Section.

To assist all caseworkers in their discussions with ratepayers, a Stables Information Sheet has also been prepared which appears as on-line information on the VOA website

2. Description

The type and physical layout of property within this class varies widely.

Stables and loose boxes may be built of brick, block-work or timber and can be found as detached single units or grouped together in the open [a “yard”] or under one roof [a “block”]. A group of looseboxes under one roof may sometimes be referred to as an “American Barn”.

Ancillary buildings may include tack rooms [where saddles, bridles, etc are kept], feed stores [for “hard” feed such as oats or pelleted “nuts” or “cubes”], barns for the storage of hay [for feed] or straw [usually for bedding, although wood shavings, shredded paper or peat may also be used] or other buildings, such as storage for a trailer or horsebox. Some properties will have a purpose-built outdoor riding arena [manège*] and occasionally an indoor school or other facilities may be found.

  • Strictly, this is pronounced ‘man-ejh’, with short ‘e’, as in ‘edge’ at the start of the second syllable. However it will commonly be heard said as ‘men-aj’, with a short ‘a’, as in ‘age’. This is a probable confusion with the French word ménage, as in ‘ménage à trois’ - a very different concept altogether!

3. Rateability

In any particular case, applying the law to the facts found on the ground will determine whether rateability is appropriate. Accordingly, inspection is vital in the determination of a proper outcome. Caseworkers need to bear in mind the possibility of three complicating matters arising before going on to consider the referencing and valuation requirements set out respectively in paragraphs 7 and 8 below. These additional matters to be considered are:

  • The Domestic / Non-domestic Borderline

  • This is explored in paragraph 4 below. This aspect will have implications for case management and on the approach to referencing.

  • Agricultural Exemption

  • This is considered in paragraph 5 below. This factor will have both referencing and valuation implications.

  • Stud Farm Relief

Whilst this aspect will need to be considered after the valuation has been completed, it also has an effect on referencing considerations. These points are explored in paragraph 6 below.

4. The Domestic / Non-domestic borderline

The starting point when considering whether premises are domestic or non-domestic is the definition of domestic property contained in section 66(1) of the Local Government Finance Act 1988 [LGFA 88]. For Stables and Loose Boxes, the critical wording is:

“66. Domestic property.

(1) Subject to subsections (2), (2B) and 2E below], property is domestic if -

(a) it is used wholly for the purposes of living accommodation

(b) it is a yard, garden, outhouse or other appurtenance belonging to or enjoyed with [emphasis added] property falling within paragraph (a) above,

(c) … … …

d) … … … “

Hence, to be considered domestic property, stabling needs to be both:

  • appurtenant to, and

  • either belonging to, or enjoyed with, living accommodation.

The following tests are designed to help caseworkers determine whether a stable [or loose box] is an “appurtenance”:

(i) Defined curtilage:

For a stabling to be an appurtenance, it must be within the defined curtilage of the dwelling. In the Concise Oxford Dictionary, curtilage is described as an “area attached to a dwelling-house as part of its enclosure”. Every case will have to be decided on its own merits, according to the relationship and layout of the various buildings within the boundaries of the dwelling apparent on the ground. Factors to take into consideration will include planning consents and conditions; distance from main living accommodation; separate vehicular access; direct access from within garden/curtilage; whether the stabling was originally constructed together with the dwelling and the degree of historic attachment. Separately metered services may also be relevant, although this could be simply a legacy from a previous occupation.

This is considered to be the primary test.

(ii) Size and scale:

Consider the scale of the stabling in relation to the dwelling. Is it out of all proportion to the size and character of the living accommodation? For instance, a mobile home with 20 loose boxes would suggest the home is appurtenant to the stabling rather than vice versa.

(iii) Close physical relationship:

For stabling to be considered “belonging to or enjoyed with” a dwelling, it must be close to it. Hence a stable block sited some distance from the dwelling will not satisfy this test.

(iv) Passing in the same conveyance:

From legal precedent, an appurtenance needs to have been capable of passing in a legal conveyance [a property transaction] of the dwelling without further words of identification or express mention. This may not be an easy concept to resolve and advice on this point is available from the Technical Adviser.

This entire aspect is explored in more detail in Rating Manual section 3: part 1 - part B - occupation and the hereditament - domestic property and the Council Tax Manual: practice note 8 - domestic / non-domestic borderline at paragraph 6 - dwellings with stables - factors governing appurtenance.

Overall, this is a complicated area of the law. If caseworkers find themselves in doubt over any aspect of it, advice should always be sought from the Technical Adviser.

5. Agricultural Exemption

Broadly, agricultural exemption will not apply to stables or loose boxes, unless the horses housed in them are kept solely for locomotive purposes when working “agricultural land ” [as defined in Schedule 5 to LGFA 88] or raised for meat for human consumption,. This point is explored more fully in Rating Manual section 6: part 6 - appendix 1 - examples of the application of the exemption provisions of schedule 5, at paragraph 5. See also the appeals of Hemens (VO) v Whitsbury Farm and Stud Ltd (1988 RA 277 HL).

That said, there might still be parts of the property where agricultural exemption could apply.

The definition of “agricultural land” in Schedule 5 to LGFA 88 includes the following wording at paragraph 2(1)(a):

“Land used as arable, meadow or pasture ground only ”.

Thus any pasture grazed by the horses housed in the stabling will be exempt.

However, the exclusions from exemption in Schedule 5 contain, at paragraph 2(2)(d):

“Land used mainly or exclusively for purposes of sport or recreation”.

Commonly, a paddock may be put to varying degrees of use, other than purely grazing, although these need not necessarily lead to rateability. Thus, where grazing land is used for the temporary erection of jumps for occasional casual recreational use, this should not affect exemption. On the other hand, land used as a permanent outdoor exercise area does not fulfil the definition of use as “arable, meadow or pasture ground only” and will be rateable. The tension between these two provisions is explored more fully in Rating Manual section 6: part 6 - part D at paragraph 4.4.

Although the stabling itself will not qualify for agricultural exemption, it is possible that other buildings in the yard may do so. The definition of “agricultural buildings” in Schedule 5 to LGFA 88 includes the following wording at paragraph 3:

“A building is an agricultural building if it is not a dwelling and

(a) it is occupied together with agricultural land and is used solely in connection with agricultural operations on the land,

b) … … … “.

Thus buildings used solely to store machinery or fertilizer used in connection with the provision and/or maintenance of any associated “pasture” will qualify for exemption. Similarly, any buildings solely used to store machinery or fertilizer used in connection with the production and subsequent harvest of hay from a “meadow” will also be exempt.

6. Stud Relief

Where stables and loose boxes are also used for breeding and/or rearing of horses and/or ponies, the rate relief for stud farms may be appropriate, providing the statutory conditions are fulfilled in regard to those parts of the premises used for this purpose.

Guidance on the application this stud farm relief is given in Rating Manual section 6: part 3 - section 1005 - stud farms.

Stud relief only applies where the stud buildings are occupied together with more than two hectares of agricultural land, providing it is not land used exclusively for pasturing horses or ponies. It is only applicable to buildings directly related to the stud use, such as the appropriate number of stables or loose boxes, foaling boxes and stallion boxes.

This relief is applied after the valuation has been made.

7. Referencing

Buildings should be measured to NIA, in accordance with the Valuation Office Agency Code of Measuring Practice for Rating Purposes.

For any establishment, it is important to record the number and type of stables or loose boxes available on the premises, together with their size and mode of construction. The expectation is that most boxes will be close to the usual average size, approximately 3.6m x 3.6m.

Ideally, they should be well-ventilated, with window openings ideally placed at least 1.8m from floor level, to ensure that there are no draughts at eye-level. Flooring and access routes will be durable, resilient and offer secure footing. There will be as much natural light as possible, with efficient use of artificial lighting. Easy access to water supplies, feed rooms or bedding litter storage and the dung heap is desirable. Details of these elements should be noted in order to help determine overall quality.

All ancillary facilities will also need to be recorded. These will generally include tack rooms, feed stores, hay and straw barns or other storage areas. Although yard layouts will vary, it is usual to find well-drained, hard surfaces between the buildings.

During the inspection, consideration should also be given to agricultural exemption and stud farm relief. To obtain a complete picture, detailed notes will need to be taken of not only the physical characteristics of all the buildings and land [if any], but also each of the uses to which they are put.

Similarly, the domestic/non-domestic borderline will also need to be considered. In this regard an accurate scale plan will need to be produced, showing the boundaries of the hereditament, the layout of the dwelling[s] and other buildings, together with their respective curtilages. In this respect, a hereditament [as distinct from a dwelling] may have a series of such curtilages, each defined by separate boundaries or fences and these need to be clearly established.

To aid the referencing and valuation of this class, an aide memoir to assist the inspection process has been attached as Appendix 1 to this section.

8. Basis of Valuation

It is expected that sufficient rental evidence will exist in the area of a Group [or cluster of Groups] to enable valuations to be carried out on a rental basis.

The recommended approach to rental analysis and valuation is to derive a value per loose box as a starting point, ensuring that the values of non-rateable items [eg living accommodation or agricultural land] are stripped out prior to analysis.

As the stabling is the essential reason for the occupation, it is important to bear this in mind when both analysing rents and preparing valuations - ancillary items should not be allowed to become a disproportionate element of the valuation.

The value of ancillaries such as tack rooms, barns, manèges, horse-walkers, etc should be added, as appropriate, to the total value applicable for the stabling

Practice note: 2017: Stables and loose boxes

1. Market Appraisal

The economic downturn has had an adverse impacted on horse ownership and riding for pleasure within the UK. Approximately 19% less individuals now participate in the sport than in 2006, with the main reason given for the decline being expense.

It is still an extremely popular pastime however with approximately 900,000 horses owned by 451,000 private individuals in Britain. In addition, a further 88,000 horses are owned by the professional sector. It is now estimated that direct expenditure for the care and upkeep of horses stands nationally at £2.8 billion, or an average equivalent of £3,105 per horse/ per annum.

The range and quality of facilities is extremely diverse, from large scale competition/ training venues, to modest livery operations offering occasional lessons.

The market for ‘county level’ eventing centres, often forming part of pony club affiliated competition circuits remains strong. Such facilities continue to attract significant investment and demand for competition places often outweighs supply. Conversely, the smaller rural operations where transport links are poor do not seem to be thriving to the same extent.

It should be noted that profitability is often not the primary motivator with equine operations. Many individuals use revenue from livery or riding lessons to fund their own hobby or interest, or are simply involved to fuel their passion for horses. The high overheads associated with running equine establishments, particularly in relation to third party insurance premiums is increasing onerous and many of the less popular stables are now struggling to remain commercially viable.

The rental value of stable hereditaments is influenced by a number of factors including:-

i.Location

ii.Layout, nature and character of loose boxes

iii.Facilities – manege, lunge rings, horse walkers, gallops

iv.Turn-out paddocks and land

v.Strong hinterland of users

vi.Good Out riding – bridleways, common land etc

vii.Space of transporters/horse trailers

2. Changes since the last Practice Note

There are no significant changes in approach, although to aid consistency across the network, advice on analysis and adjustment is reemphasised within Section 4 of this practice note.

3. Ratepayer discussions

No discussions have been held with the industry.

4. Valuation scheme

There is no agreed scheme for this class.

The purpose of this practice note is to provide costing information and other valuation material appropriate for this class of property in respect of the R2017 Revaluation. This PN should be read in conjunction with the main section.

For analysis purposes, land rental values should be adopted within the range of £120 to £200 per acre. Regard should be had to local demand, size and quality (for example sloping site/ suitability for grazing).

Other additions should be valued in accordance with the ‘2017 Cost Guide’. The resultant cost should then be amortised at 4.4% for England and 3.8% for Wales, as interim measure until the higher decapitalistion rate for 2017 is known.

When stripping out residential accommodation for analysis purposes, it is incorrect to deduct the full ‘open market value’ of comparable dwellings. An adjustment is required to reflect that rent paid on the domestic part will be lower as it forms part of a larger commercial operation. Moreover, any comparable residential rent will not be arrived at on the same basis, i.e. residential lettings require the landlord to carry out external and internal repairs, regular inspection of electrical and gas installations and higher landlord’s insurance costs.

In the absence of better evidence a judgement needs to be made on the facts of the amount to be deducted from the residential element, to reflect any disadvantage of being sited within a commercial operation, for example a 50% deduction may be appropriate. This should reflect these matters together with any planning restrictions in place or noise/ disruption from the adjacent commercial activity.

It is acknowledged that in some locations rental evidence may be limited or require significant adjustment for this class. To ensure a consistent approach across the network, analysis and adjustment has been undertaken by the Class Coordination Team.

The Unit CCT member should be approached when dealing with both maintenance and settlement of this class.

Practice note 1: 2010: Stables and loose boxes

1. Co-Ordination Arrangements

Stables and Loose Boxes Farms are a Group class and subject to co-ordination arrangements as outlined in Rating Manual: Section 6 - Part 1 - Co-

Special Category (SCAT) Code 264 should be used.

2. Valuation Approach

2.1 The Loose Box as a Unit of Comparison

The first step when establishing a local valuation scheme is to analyse the rental evidence to determine the rateable value of a standard loose box. This will vary both within an individual Group area and from Group to Group, depending on location, the degree of competition and the demand for such facilities in a particular area.

When analysing rents, adjustments should be made to reflect factors relevant to the particular hereditament, such as the age and quality of the buildings, availability of services, availability of exercise paddocks, access, planning restrictions on use, etc.

Typically, a standard loose box will have a floor area of some 13.5m2, an internal height of at least 2.7m and be of brick or block construction and have adequate drainage and ventilation. Loose boxes within the range 10m2 to 20m2 should be valued at the same price per box, additions/allowances being made for boxes outside this range.

Loose boxes either open directly onto an external yard or may be arranged to open onto an internal corridor. The latter arrangement can be found in older stable buildings where stalls have been converted into loose boxes or where loose boxes have been provided within a former agricultural building. These are sometimes called caged boxes.

Many new, purpose-built, stables also follow this arrangement and are sometimes referred to as American barns. Such buildings should be valued on a price per loose box basis, rather than by applying a price per m2 to the gross area of the building.

2.2 Ancillary Buildings

Generally, these should be valued on a price per m2 basis. However, when inspection reveals that tack rooms or other storage areas are clearly akin to a standard loose box, then the overall loose box price can be adopted. Allowances for poor quality and/or quantum may be appropriate in some cases.

It must be borne in mind that the primary use of this category of property is the stabling of horses and that excessive ancillary facilities may not add to the income generating potential of the premises and hence would not be reflected in the hypothetical tenant’s rental bid. An example would be stables created from former agricultural buildings, which may include an overabundance of barns or other storage buildings within the holding. Judgement must be used to ensure that the value applied to ancillary facilities is not disproportionate to the value of the stables.

2.3 Outdoor and Indoor Arenas

The useable area of an arena used for riding should be a minimum size of 20m x 40m.

A standard size outdoor arenas should usually be valued within the range of 75p - £1.50/m2, taking the standard 800m2 at £1 /m2 as a norm.

The construction and drainage, riding surface used and associated ancillary features, such as lighting and the provision of kick boards [fixed to the perimeter to the arena to protect rider, horse and building] are all factors that should be taken into account within this range of values.

Whilst there may be some superficial similarities between some buildings used for indoor schools and industrial or warehouse buildings, the differences are such (eg planning permission, quality, finish, floors, insulation along with location, access, etc.) that industrial or warehouse valuation scales are not appropriate when valuing this type of property.

Typical value is likely, in most cases, to be in the £4 - £6/m2 range for the average school.

2.4 Paddocks & Other Land

For analysis and where rateable, an appropriate price per acre should be adopted in accordance with local office values.

2.5 Horsewalkers

The concrete base should be costed at around £50/m2. For surrounding fencing, adopt £15-18/m for three-rail timber and £18-20/m for plastic rails and posts.

The electric motor and turning frame are not rateable.

2.6 General

The figures referred to above are for general guidance only and are subject to local evidence, information on market rents, individual circumstances and other relevant valuation criteria.

Appendix 1: Referencing of stables

Hints to Referencers

Referencing stables and loose boxes is not an easy undertaking, as there are several elements to consider:

1. The extent and boundaries of the hereditament.

This may include both domestic and non-domestic elements.

2. The physical characteristics of the buildings.

Again these may be either domestic or non-domestic.

Non-domestic property should be measured to NIA, in accordance with the Valuation Office Agency Code of Measuring Practice for Rating Purposes.

Clearly it is important to record the number and type of stables or loose boxes available on the premises, together with their size and mode of construction.

Ideally, they should be well-ventilated, with window openings ideally placed at least 1.8m from floor level, to ensure that there are no draughts at eye-level. Flooring and access routes will be durable, resilient and offer secure footing. There will be as much natural light as possible, with efficient use of artificial lighting. Easy access to water supplies, feed rooms or bedding litter storage and the dung heap is desirable. Details of these elements should be noted in order to help determine overall quality.

All ancillary facilities will also need to be recorded. These will generally include tack rooms, feed stores, hay and straw barns or other storage areas. Although yard layouts will vary, it is usual to find well-drained, hard surfaces between the buildings.

Other items may include: a sand school [sometimes known as an arena or manège]; horse walkers; wash down areas; solariums or even saunas.

3. The domestic/non-domestic borderline.

To enable this to be established effectively and efficiently, an accurate scale plan will need to be produced, showing the boundaries of the hereditament, the layout of the dwelling[s] and other buildings, together with their respective curtilages. In this respect, a hereditament [as distinct from a dwelling] may have a series of such curtilages, each defined by separate boundaries or fences and these need to be clearly established.

This entire aspect is explored in more detail in Rating Manual section 3: part 1 - part B - occupation and the hereditament - domestic property and the Council Tax Manual: Practice Note 8: Domestic / Non-Domestic Borderline at paragraph 6 - Dwellings with Stables: Factors governing Appurtenance.

4. Agricultural exemption.

To obtain a complete picture, detailed notes will need to be taken of not only the physical characteristics of all the buildings and land [if any], but also each of the uses to which they are put. Broadly, agricultural exemption will not apply to stables or loose boxes, unless the horses housed in them are kept solely for locomotive purposes when working “agricultural land ” [as defined in Schedule 5 to LGFA 88] or raised for meat for human consumption,. This point is explored more fully in Rating Manual section 6: part 6 - appendix 1 - examples of the application of the exemption provisions of schedule 5, at paragraph 5.

5. Stud Farm Relief.

Again, this requires a painstaking record of the actual uses to which the relevant buildings are put and the way the land is farmed. This is because stud relief only applies where the stud buildings are occupied together with more than two hectares of agricultural land, providing it is not land used exclusively for pasturing horses or ponies. It is only applicable to buildings directly related to the stud use, such as the appropriate number of stables or loose boxes, foaling boxes and stallion boxes.

Specific guidance on the application of this stud farm relief is given in Rating Manual Section 6 part 3 Section 1005 - Stud Farms.

Some Practical Thoughts:

A great deal of time and effort is likely to be saved if some preliminary work is done before visiting the site.

First and foremost, carefully consider what is on the report – it may seem like a non-domestic rating case, but there may well be domestic elements to consider, and vice versa. So, to avoid repeated visits from the VOA, ensure that the case is correctly allocated.

A few minutes spent investigating what might be encountered on the site will enable sensible preparations for the site visit to be made. Suitable sources of valuable information will include a “Google” search on the names of both the occupier and the property, together with a look at internet photographic resources to see what the property comprises.

Prepare a plan of the likely hereditament. An extract from the Ordnance Survey at 1:2500 or 1:1250 scales will have already done a great deal of the referencing work, especially when it comes to establishing curtilages.

When on site, it is absolutely vital to establish the extent of the entire hereditament – this may be a great deal larger than one initially thinks. Indeed, there may be more than one.

So it is imperative to ask questions [remember Kipling’s six “Honest Serving Men”: What and Why and When and How and Where and Who?]. Ask these open questions before starting to measure.

Ask permission to take photographs. They should show the relationships between house [if any] and buildings, and vice versa. They should also show what the buildings look like and their uses. It is rare for an interior photograph taken from the doorway of a loose box used to house a horse to be particularly helpful, but a shot taken of the view in the other direction [ie from the inside looking out] is much more likely to be informative. On the other hand, if the loose box is not used for stabling purposes, an interior shot can very readily record the facts of the matter.

Throughout the inspection, look for evidence that suggests where the domestic curtilage might lie. Again, the sensible use of photographs might be helpful.

Finally, because of the legal complexities that can result from stable cases, it is good practice to consult with the Rating Team Leader before making a final decision - all the more if there is even the slightest doubt about the correct course of action.

Checklist of details required to complete survey, for use as an on site aide memoir.

Below is an aide mémoire checklist of the details that are required to produce a complete survey for both NNDR and Council Tax purposes. When printed out using long edge duplex, it will fit on a single A4 sheet of paper.

Appendix 2: Equestrian properties inspection guide

Inspection guide providing advice

a.preparation for inspection

b.inspection

c.post inspection

A link to this checklist is available.

Appendix 3: Equestrian properties inspection checklist

Checklist of details required to complete inspection - for use on site as an aid memoir

A link to this checklist is available.