Stud farms
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
1.1 This instruction applies to all stud farms.
Description in rating list: Stud Farm and Premises.
Special Category: Code 269
SCAT suffix: G
Bulk Class: M
3.1 The Animal & Rural Class Co-ordination Team (CCT) has overall responsibility for the co-ordination of this class. Each Regional Valuation Unit (RVU) has a representative on the team. The team is responsible for the approach to and the accuracy and consistency of stud farms.
4.1 RVU will be responsible for referencing, gathering facts and valuation.
4.2 The Animal & Rural CCT will deliver practice notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating lists. Caseworkers have a responsibility to:
- follow the advice given at all times – practice notes are mandatory
- not depart from the advice given on appeal or maintenance work without approval from the CCT
- seek advice from the CCT before starting any new work
5.1 General
For rating purposes, stud farms will include land and buildings used for the breeding and rearing of horses or ponies. The term should not be taken to include the breeding or rearing of any other animals.
Stud farming operations range widely. Sites will include those which have an individual mare or stallion kept for breeding, to large scale/high value commercial breeders of racehorses, in bespoke yards with special veterinary facilities.
Although their levels of sophistication may vary, all stud farms will strive to provide a secure and quiet environment for their horses and ensure that they are isolated from disease.
The primary need for a stud farm is good grazing and outdoor paddocks, with an adequate water supply. The paddocks need to be well secured with materials that will not cause injury to the mares and foals. It is usual to find that timber post and rail fencing is employed to create a series of paddocks around the stud buildings. Mares and foals will spend most of the time in the outdoor paddocks, except during confinement, weaning and during periods of inclement weather.
The stud buildings are often considered by breeders to be of lesser importance (in contrast to racing, or livery yards). The aim is to give the growing foals as much light, air and exercise as possible, and to allow the mares to produce their milk from grass whenever feasible. Buildings will still be present though, and are likely to include loose boxes (for resident or visiting mares), stallion boxes (these will be larger and are often better appointed), covering areas/yards (where the mating takes place), foaling boxes, tack and feed rooms, together with covered storage for hay and straw. Some studs will have an office, additional veterinary facilities or other specialist buildings. Quality can vary from poor, converted farm buildings to good quality purpose-built accommodation.
5.2 Agricultural Exemption
Buildings
It was confirmed in the appeals of Hemens (VO) v Whitsbury Farm and Stud Ltd (1988 RA277HL) that horses and ponies, other than those used for farming the land or reared for food, are not “livestock” within the definition in Section 1(3) Rating Act 1971, now paragraph 8(5) of Schedule 5 to the Local Government Finance Act 1988 (LGFA ‘88).
This means that loose boxes stabling horses and ancillary buildings, such as tack rooms, feed stores and such are not “agricultural buildings” and are therefore rateable.
However, there may be parts of the property which are used for an exempt purpose. An example being a hay barn used either to store a hay crop taken from the land occupied by the stud farm proprietor, or to store hay solely for livestock which are also kept by the proprietor of the stud enterprise. Exemption considerations should not be limited to a whole building but also to a separate part of a building that is solely used for an exempt purpose.
If there is property which is used wholly for exempt agricultural purposes at certain times of the year and wholly for non-exempt purposes at other times, provided all the parties are agreeable, there is no objection to valuers agreeing a level of assessment which reflects the proportion of time used for exempt purposes to non-exempt purposes throughout the year, although the technically correct approach must be to alter the list each time the circumstances change.
Land
“Agricultural land” is defined in paragraph 2 of Schedule 5 to LGFA ’88. This definition includes:
“Land used as arable, meadow or pasture ground only.”
However, paragraph 2(2)(d) of Schedule 5 goes on to state that agricultural land does not include:
“Land used mainly or exclusively for purposes of sport or recreation.”
In short, land used only for the grazing of horses should be treated as “agricultural land” within the meaning of paragraph 2(1)(a) of Schedule 5.
There may be varying degrees of use, in addition to grazing, that will not always lead to rateability. Where grazing land is used for the temporary erection of jumps for occasional casual recreational use, this should not affect exemption, but land used primarily or permanently as an outdoor exercise area does not fulfil the definition of use as “arable, meadow or pasture ground only” and will be rateable.
A full explanation of when other land and/or buildings used to keep horses qualify as exempt agricultural land or buildings is given in Rating Manual Section 2 – Valuation Principles Part 6: Exemptions Part D Agricultural Exemption.
5.3 Relief from Assessment, where applicable
Parliament legislated for partial rate relief from the payment of rates for farmers who also breed horses and ponies, by enacting Paragraph 2A.- (1) of Schedule 6 to LGFA 1988 (inserted by paragraph 38(11) of Schedule 5 to the Local Government & Housing Act 1989).
This relief from assessment applies to:
“…… any hereditament the whole or part of which consists in buildings which are:
- used for the breeding and rearing of horses or ponies or for either of these purposes
- are occupied together with any agricultural land or agricultural building.”
Paragraph 2A.- (2) provides that the relief for hereditaments described in paragraph 2A - (1) is to be the amount of rateable value of the hereditament, less the smaller of the following amounts:
“(a) such amount as the Secretary of State may by order specify for the purposes under this paragraph
(b) the amount which but for this paragraph would be determined under paragraph 2 above [i.e., paragraph 2 of Schedule 6 to LGFA 88] in respect of so much of the hereditament as consists of buildings so used and occupied.”
5.4 Summary of the Application of Relief
The relief will only apply to stables, foaling boxes, stallion boxes, and covered yards or any other buildings used for breeding or rearing horses and/or ponies, but not keeping them for any other purpose, where:
- the stud operations are part of an otherwise exempt working farm, and/or
- the stud buildings are occupied together with over 2 hectares of land which is used predominantly as exempt agricultural land other than for the pasturage of horses or ponies.
Any difficulties with interpretation of paragraph 2A of Schedule 6 to LGFA 88 should be submitted to the CCT in the first instance.
5.5 Examples of how this Stud Relief works
Practical examples of how stud relief works are set out in Appendix 1.
5.6 Definition of Agricultural Land & Agricultural Building for the purposes of paragraph 2A -(1) of Schedule 6 LGFA 1988.
Paragraph 2A.- (3) provides that:- agricultural land for the purposes of paragraph 2A - (1) should be land of more than 2 hectares which is:
agricultural land within the meaning of paragraph 2 of Schedule 5 to LGFA 88 and is not land used exclusively for pasturage of horses or ponies
agricultural building in paragraph 2.A - (1) should be construed in accordance with Paragraphs 3 to 7 of Schedule 5 to LGFA 1988.
In order to ensure qualification under paragraph 2A - (3) and to ensure that land is not used exclusively for the pasturage of horses or ponies, it is not unknown for other grazing animals to be kept at, or imported for a time onto, stud farms. In the latter instance, visiting sheep are sometimes referred to as a “flying flock”.
5.7 Other terms
5.8 Breeding
In the larger scale operations, breeding stock may include barren mares (i.e., those not currently in foal) and new stallions to be used in the next season’s breeding programme, in addition to stallions or mares currently being used for breeding.
5.9 Rearing
It is considered that whether young stock is being ‘kept’ as opposed to ‘reared’ will depend upon when they have been completely weaned from the mare. Whilst horses and ponies do not fully mature until at least 4½ - 5 years old they will often be put to other work before this age.
The foal will normally be weaned from its mother after approximately 8 months, although domestic foals can be separated from the mare as young as 6 months. Foals experience mental and physical stress on separation. The foal’s digestive system must cope with the sudden removal of milk from the diet, which is mainly digested in the small intestine whereas forage is fermented in the hind gut. This is a major diet change. As well as eating grass or hay, the foal should be eating hard feed for at least a month before weaning so that the gut flora have time to develop. A foal’s immune system takes about a year to fully develop. The decision to wean will allow the mare to come back into work or to concentrate on the next foal.
A foal that has been weaned from its mother, and has an independent existence where it can run with a herd, away from its mother, can no longer be regarded as being reared as opposed to being ‘kept’. This is no different than with human beings. Potential ongoing training of a horse after this stage is distinct from rearing.
A foal that has been weaned but continues to be ‘kept’ will proceed to be handled (part of the training process) and halter trained to make subsequent handling easier. Horses bred for sale will also normally be offered when yearlings.
It should be noted that some racehorses can start racing as 2 year-olds. Horses for, show jumping and riding, working or show ponies are not usually used for riding until 4 years of age. In the meantime, they might be used for breeding or showing in hand. These are matters associated with keeping equines after they are over one year old and is distinct from the ‘rearing’ process.
There are three main methods of weaning - paddock, box and fence.
Paddock weaning
This is a popular method on stud farms where a group of mares and foals will be separated by gradually removing the mares to a paddock some distance away and the foals will be initially distracted by grazing and playing with other foals.
Box weaning
Another method used on stud farms is for mares and foals to be paired/grouped and taken from a paddock to a stable. The foals are left in the stable whilst the mares return to the paddock. The following day the foals will be settled and can be turned out to a different enclosure.
Fence weaning
This is similar to paddock weaning except the mares are moved to an adjacent paddock. The fence prevents the foal from nursing but allows mare and foal to stay close together. Generally, this is the least stressful method of weaning.
It will often be argued that foals, yearlings are retained as ‘stores’ but this doesn’t automatically mean that buildings are required for this purpose. Apart from the short confinement process mares and stores will be happier if they are out in the paddocks with other horses.
6.1 Inspections should be carried out in accordance with the Valuation Office Agency Property Inspectors Manual.
6.2 When inspecting a stud farm, property inspectors should record the location and description of to include the following:
- location
- site - size, shape, and topography
- buildings infrastructure - number and type of stables
- ancillaries – tack rooms, storage, arenas etc
- gallops – length, construction, and surface
- land – agricultural, turn out and domestic boundary
- services - heating energy source and water source
- car parking
- photographs of the main constituent parts of the site.
6.3 An inspection checklist is appended to this section (Appendix 2) and should be completed for all new properties, updated for maintenance work, and stored in the property folder of the Electronic Document Records Management (EDRM) system.
Stabling
It is important to record the number and type available, together with their size and mode of construction. Ancillary facilities will also need to be recorded. These will generally include tack rooms, feed stores, hay and straw barns or other storage areas.
Stables and ancillaries should be measured in accordance with the inspection checklist guidance.
Land
The area of land that is occupied together with the stud buildings will need to be established, as will the use of any other land and buildings within the hereditament. This may well involve looking at the wider picture and not just the immediate stud premises.
7.1 Rating surveys should be captured on the Rating Support Application (RSA). Plans and surveys should be stored in the property folder of Electronic Document and Records Management (EDRM).
7.2 Historically, many different sub-location codes have been used to value this type of property across the country. For revaluations 2026 onward, the national sub location of STUD should be used.
7.3 The common use codes used to record the various stables/boxes that may comprise a riding school or livery yard are outlined in the table below. These should be recorded as units, e.g.,12 stables and not in square metres.
| ACCOMMODATION USE CODE | DESCRIPTION | DEFAULT PERCENTAGE OF MAIN SPACE RATE (see section 8.3-8.6) | REMARKS |
|---|---|---|---|
| LBA | American Barn Stables | 100% | Stables in purpose built or converted barn usually with a centre isle layout. |
| LBT | Timber Stables | 100% | Stables situated outdoors and not in a barn made of timber. |
| LBB | Traditional Brick/Block Stables | 100% | Stables situated outdoors and not in a barn made of brick/block. |
| LBC | Caged Stables | 90% | Stables situated indoors. Older style set up of stables. These are accessed via narrow corridors with more limited light and air flow. Not to be confused with American Barns. |
| LBL | Larger Stables 20m2 + | 110% | Stables that are 20m2 or greater and are not foaling stables. |
| LBP | Pony Stable 10m2 or less | 90% | Stables that are 10m2 or less, commonly used for housing ponies. |
| FOL | Foaling Stable | 110% | Stable used for foaling 20m2+. |
| STA | Stalls | 50% | Area to tie up horses/ponies. Usually has divides either side of some form but no door. |
Only stables or stalls should be captured as an accommodation use code. Everything else should go in ‘other additions.’
The common use codes used to record the various ‘other additions’ are outlined in the table below:
| OTHER ADDITION USE CODE | DESCRIPTION | RECORDED IN |
|---|---|---|
| ARI | Indoor Arena | M2 |
| ARO | Outdoor Arena | M2 |
| ARF | Floodlit outdoor arena | M2 |
| ARG | Outdoor grass arena | ACRES |
| BLD | Residual building | M2 |
| CAF | Cafe | M2 |
| CAR | Caravans (reflected) | M2 |
| CVN | Caravans | M2 |
| CHA | Changing room | M2 |
| CLB | Clubhouse | M2 |
| CNP | Canopy | M2 |
| CNT | Canter way | UNITS |
| CVY | Covering yard | M2 |
| DUT | Dutch barn | M2 |
| DUR | Dutch barn (reflected) | M2 |
| EVI | Additional eventing income | UNITS |
| GLG | Grass Gallops | ACRES |
| GLP | Polytrack all-weather gallops | FURLONGS |
| GLW | Non Polytrack all-weather gallops | FURLONGS |
| HWI | Indoor horse walker | NUMBER OF HORSES WALKER TAKES |
| HWO | Outdoor horse walker | NUMBER OF HORSES WALKER TAKES |
| ITRN | Indoor turn out (loose barn) | M2 |
| JMP | Grass jump paddock | ACRES |
| JUD | Judges box | M2 |
| LFG | Rough surface, fenced land | M2 |
| LFH | Hard surface, fenced land | M2 |
| LFU | Unsurfaced, fenced land | M2 |
| LOG | Rough surface, unfenced land | M2 |
| LOH | Hard surface, unfenced land | M2 |
| LOU | Unsurfaced, unfenced land | M2 |
| LUN | Lunge ring | M2 |
| MES | Staff room/kitchen area | M2 |
| OFR | Office (reflected) | M2 |
| OFF | Office | M2 |
| OWN | Owners room | M2 |
| OUT | Outdoor seating space | M2 |
| PIT | Caravan pitch income | UNITS |
| PKR | Portable building (reflected) | M2 |
| PKN | Portable building | M2 |
| POL | Polo pitch | HECTARES |
| SCR | Storage container (reflected) | UNITS/M2 |
| SCN | Storage container | UNITS/M2 |
| SEA | Water walker | UNITS |
| SHR | Shed (reflected) | M2 |
| SHD | Shed | M2 |
| SHL | Field Shelter | M2 |
| SOL | Solarium | M2 |
| SOV | Shop/retail area | M2 |
| SPC | Spectators stand indoor | M2 |
| SPO | Spectators stand outdoor | M2 |
| STR | Store (reflected) | M2 |
| STO | Store | M2 |
| SWM | Equine swimming pool | UNITS |
| TCR | Tack room (reflected) | M2 |
| TAC | Tack room | M2 |
| TRN | Turn out paddock (not grass) | M2 |
| WDI | Indoor wash down area | M2 |
| WDO | Outdoor was down area | M2 |
| WCB | Toilets | M2 |
| WKR | Workshop reflected | M2 |
| WKS | Workshop | M2 |
| XC1 | Substantial cross-country course | UNITS |
| XC2 | Cross country course | UNITS |
8.1 It is expected that sufficient rental evidence will exist to enable valuations to be carried out on a rental’s basis. The Notice Requesting Statutory Information (Form of Return) for this class of property is typically obtained using VO 6003.
8.2 Analysis of evidence
The analysis of evidence should be on an all-inclusive basis, to reflect tack rooms, food stores, admin offices, rug rooms, maintenance storage and hay barns within box/stable prices. This inclusive basis must be in proportion to the number of stables on site. Where any non-standard features exist, such as disproportionate sized offices or hospitality suites, these must be stripped out.
The two main problems in analysis are the approaches to stripping out or apportioning the rent/value relating to domestic accommodation and areas of land.
Valuers should be aware that stripping out the full rental value of domestic accommodation (if based on other non-composite dwellings within the locality), may not be appropriate.
Where there is land, consideration should be given to stripping this out of the rental value.
It is recommended that advice on analysis and adjustment is sought from the Class Coordination Team where rents include amounts for domestic accommodation or land.
8.3 Stables
Construction and layout of the stables will vary. Traditional boxes will be brick built with a pitched tile roof with an overhang to provide shelter from the weather. Some older styles have what are termed ‘caged boxes’ where a run of boxes and a ‘corridor’ are within the structure of the building providing full protection from the elements but often at the expense of access difficulties. A modern version of this is the ‘American barn’ arrangement where typically a large ‘at cost’ type barn will be divided up by block partitions to have boxes running the length of both of the longest walls with back-to-back boxes down the middle of the barn.
These barns will often be open ended to provide the proper ventilation necessary to prevent the spreading of infections.
8.4 There may need to be an addition of up to 25% on ‘average/ standard’ stables to reflect additional quality/size benefits. It would be expected that the maximum 25% addition would be appropriate for those stables which have additional outdoor pens attached to them.
8.5 Similarly, a discount from the ‘average / standard’ rate may be justified where the stabling provides a particularly low standard of accommodation compared with the average. For example, smaller pony stables or stalls.
8.6 Outdoor timber stables will not be discounted simply because of their construction. However, a discount from the standard rate maybe applicable for quality reasons following an exercise of valuer judgement.
8.7 Ancillaries
8.8 Tack rooms, hay/bedding stores, rug rooms, yard maintenance stores and admin offices should all be shown in the valuation. These items will be considered as being reflected in the box/stable value, and shown as a nil value, but only in proportion to the number of stables on site.
8.9 Other ancillaries that maybe on site include horse walkers, indoor and outdoor arenas and lunge rings, which should be added to the valuation.
8.10 CCTV or other security systems installed for monitoring the health and well-being of the horses as well as for security protection should be valued. Valuation guidance from the CCT should be referred to where this is the case.
8.11 Claims arising for discount due to damage or flooding of arenas or gallops should be considered under the normal repair principles.
8.12 Quantum allowance
The quantum scheme for stud stables starts at the 100th stable/box at 10% and increases by 0.2% for each stable until a maximum of 25% is reached.
8.13 Relativities
Relativities may require tuning to reflect individual circumstances following the exercise of valuer judgement.
Rating Support Application (RSA)
Survaid
Valuation Panel 1 (VP1) animal & rural class co-ordination team (CCT) members
SharePoint guidance for G class suffix
Background
The Order referred to in paragraph 2A.- (2)(a) of Schedule 5 to the Local Government and Housing Act 1989 is contained in a series of Statutory Instruments:
The Non-Domestic Rating (Stud Farms) Order SI 1989/2331 came into force on 4 January 1990 and specified that the deduction to be made from the rateable value was to be £2,500 in both England and Wales.
For England only, the Non-Domestic Rating (Stud Farms) (England) Order SI 2001/ 2586 came into effect on 15 August 2001 and increased the rateable value deduction to £3000. The application of the 1989 Order to England was revoked after this date.
Again, for England only, the Non-Domestic Rating (Stud Farms) (England) Order SI 2004/3151 came into effect on 1 April 2005 and increased the rateable value deduction to £3500. The application of the 2001 Order was revoked after this date.
For the avoidance of doubt, the 2004 Order does not apply to the 2000 (or earlier) rating lists or any hereditament situated in Wales.
The statute has further been amended with effect from 1 April 2010, by the Non -Domestic Rating (Stud Farms) (England) Order 2009 SI 2009 No. 3177 which states that up to £4200 relief may be applied where appropriate. The position in Wales was not altered.
Article 5 of the Non-Domestic Rating (Reliefs, Thresholds and Amendment) (England) Order 2017 amended article 2 of the Non-Domestic Rating (Stud Farms) (England) Order 2009 to increase the amount of the rateable value deduction for stud farms from £4,200 to £4,700. The position in Wales has not altered.
How the relief operates
The relief applies where the hereditament comprises, in whole or in part:-
a) buildings used for the breeding or rearing of horses or ponies, or for either of those purposes;
and
b) are occupied together with any “agricultural land” or “agricultural building”.
In this context, “agricultural land” means any land of more than two hectares which is agricultural land within the meaning of paragraph 2 of Schedule 5 to the Local Government Finance Act 1988 and is not land being exclusively used for the pasturing of horses or ponies.
“Agricultural building” is to be construed in accordance with paragraphs 3 to 7 of that same Schedule.
The requirement is that the agricultural land should not be exclusively used for the pasturing of horses or ponies. This should be interpreted to mean that other animals should graze the land, but not necessarily at the same time. Sometimes, agents acting for ratepayers may refer to this as the “over-grazing” requirement. If, instead of being grazed, the land is used for some other purpose that still enables it to qualify as “agricultural land” (as defined), then the requirement will still be met.
The relief does not apply to any land, which is used for stud farm purposes. Unless the land is exempt under paragraph 2(1) of Schedule 5 to LGFA 1988, it should be assessed and relief must not be set against it. (This restriction does not, of course, apply to land which comprises the site of stud farm buildings.)
The following examples illustrate how the relief applies to the 2023 rating lists in England after 1 April 2023. For rating lists in Wales, simply substitute the lower RV relief of £2500. In each of the examples it is assumed that the statutory requirements are complied with and the stud premises are occupied together with more than 2 hectares of agricultural land.
Example 1
In this case, the land is used as a hard standing for motor vehicles and storage relating to the stud farm, the value of which is not reflected in the value of the buildings.
| RV in £ | ||
|---|---|---|
| Stud Farm Buildings | 6000 | |
| Land (hard standing and storage) | 500 | |
| Total RV | 6500 | |
| Deduct “specified amount” for Stud Farm buildings | 4700 | |
| Entry in list | 1800 |
In this case the rateable value of the buildings exceeds £4700 and so the valuation is reduced by the full specified amount.
Example 2
In this example, the land is also used as hard standing for motor vehicles and storage relating to the stud farm, the value of which is not reflected in the value of the buildings.
| RV in £ | ||
|---|---|---|
| Stud Farm Buildings | 3000 | |
| Land (hard standing and storage) | 500 | |
| Total RV | 3500 | |
| Deduct value of stud farm buildings | 3000 | |
| Entry in list | 500 |
NB: In this case the value of the buildings is less than £4700, so the deduction is restricted to the actual value of the buildings.
Example 3
Here the occupier of the stud farm also occupies contiguous buildings that are used for another purpose, which is rateable. However, for the sake of this example, a separate assessment is not justified.
| RV in £ | ||
|---|---|---|
| Stud Farm Buildings | 3000 | |
| Storage building | 4000 | |
| Total RV | 7000 | |
| Deduct value of stud farm buildings | 3000 | |
| Entry in list | 4000 |
NB: Once more, only if the value of the stud farm buildings was £4700, or more, would the valuation be reduced by the full specified amount of relief.
Example 4
Here the only rateable property is the stud farm itself.
| RV in £ | ||
|---|---|---|
| Stud Farm Buildings | 4000 | |
| Total RV | 4000 | |
| Deduct value of stud farm buildings | 4000 | |
| Entry in list | Nil |
NB: In this case an entry for £ Nil would be made in the rating list.
Description in the Rating List
When altering the rating list, valuers should endorse the description with the letters “(PR)” immediately after the words “Stud Farm”. This removes the need to inform occupiers that partial relief has been applied and will also be a helpful indication for persons who might otherwise seek to use the assessments as comparables for some other class of property.
1. Market Appraisal
1.1 As an industry overall there has been a reduction in foal production. This decline however is generally limited to those breed for personal recreational use, in that less people now ride as a pastime and existing horse owners are keeping animals longer. This trend of horse ownership does not apply to those classing themselves as ‘professionals’ where numbers have risen.
1.2 Demand for thoroughbred racehorses has remained relatively static in terms of volumes but is showing increases in prices paid. Statistics from one of Britain’s largest auction houses shows continued increases in the average price for thoroughbred racehorses, with major auctioneers reporting record breaking amounts paid for the best thoroughbreds at recent sales.
1.3 Auction houses clearance rates remain constant and report a consistent demand for top quality horses from overseas buyers, particularly from Middle Eastern countries/ states. Many of these horses remain in the United Kingdom for training, whilst others are exported as far as Australia.
1.4 New statute, The Horserace Betting Levy Regulations 2017 (SI2017/589) introduced a revised levy system taking effect from 25 April 2017 which will maintain demand for good quality thoroughbreds, therefore benefitting stud farms which specialise in breeding racehorses. This legislation, increased prize money in 2018 to £160 million, from £95 million in 2012, and ensures previously lost revenue is now captured from bets placed online and offshore.
1.5 In conclusion, it is clear that largescale, well-appointed stud farms breeding professional standard horses/ racing thoroughbreds are performing markedly better than smaller enterprises predominately supplying horses and ponies for recreational use.
2. Changes since the last Practice Note
2.1 There are no significant changes in approach, although to ensure consistency across the network, it is vital that advice is sought from CCT members when undertaking adjustment and analysis of rental information.
3. Ratepayer discussions
3.1 No discussions have been held with the industry.
4. Valuation scheme
4.1 There is no agreed scheme for this class.
4.2 It is vital to note the operational differences between a stud farm and other equestrian operations such as racing stables. For stud farms adequate pasture land is critical as horses and foals tend to be outside grazing for the majority of time, whereas the opposite is true for racing stables where thoroughbreds generally remain stabled. So, in effect availability of suitable land is paramount to that of stabling unlike racing stables where the opposite is true. Comparison of values between these classes is therefore inappropriate.
4.3 Box (or stable) values are determined by prevailing rental levels within any locality and are generally used as a ‘unit of comparison’ for studs where no direct rental evidence exists. It is acknowledged that in some regions, rents may be limited or require such significant adjustment to hold little weight. It is therefore vital that initial analysis and adjustment is overseen by the Equine Class Coordination Team.
4.4 Allowances for fragmentation are considered inappropriate, on the basis that having bloodstock in several different yards is beneficial for disease control.
4.5 To ensure consistency, advice should be sought from the Class Coordination Team on appropriate deductions to be made when stripping out domestic accommodation for the purposes of rental analysis. Information should be sought as to the type/ style of dwelling occupied as it could potentially range from a mobile home to a substantial dwelling. Details should also be sought as to other accommodation on site, such as groom’s quarters.
4.6 For analysis purposes, land rental values should be adopted within the range of £150 to £460 per acre. Regard should be had to local demand, size and quality (for example sloping site/ suitability for grazing). Conversely for valuation purposes, where such land is used as grazing/ pasture, it will be treated as exempt under Schedule 5 of the Local Government Finance Act 1988
4.7 National tables for ‘other additions’ not reflected within box prices, have been devised to ensure consistency. Values are based on replacement costs, then amortised to produce an annual equivalent. It is acknowledged however that in limited circumstances further adjustment may be required to reflect quality and other specific factors.
4.8 In accordance with Paragraph 2A(1) Schedule 6 LGFA 1988, the application of stud relief should be considered as an end stage adjustment once the Rateable Value has been determined. It is essential that relief is only be applied to actual buildings used for ‘stud purposes’. Buildings at stud farms utilized for other equine purposes do not qualify. The Rating Manual Section 6 Part 3 Section 1005 - Appendix 1 provides worked examples of how the relief should be applied, which is in effect the lesser of that determined by statute or the sum of buildings used for stud purposes.
4.9 The non-domestic rating (Stud Farms) (England) Order 2009 SI 2009 No. 3177 as amended by the non-domestic rating (Reliefs, Thresholds and Amendment)(England) Order 2017, states that up to £4,700 relief may be applied where appropriate. The position in Wales has not altered. This will need updating with revised thresholds once the R23 SI is published. Historically provided just before publication of draft list
4.10 Class Coordination Team members should be approached when dealing with both Check, Challenge, Appeal and maintenance work on this class.
1. Market appraisal
As an industry the breeding of race horses has suffered the effects of the economic downturn, through falls in the value of bloodstock sales and a reduction in foal production.
Between 2008 and 2012 Britain’s thoroughbred production dropped by a significant 22%, this decline has since stabilised. The impact on the lower quality, often part-time end of the sector was most apparent with the larger professionally organised studs faring better.
Volumes and average price of horses sold at public auctions are considered to be key indicators of the health of the market. Britain’s two largest auction houses (Tattersall’s and Doncaster Bloodstock Sales) reported significantly reduced sales between 2008 and 2011, but an upturn in the market from 2011 onwards. The average sale price per lot of £47,000 reached in 2012 is on par with pre recession levels but total volumes sold are still significantly lower.
Demand for top quality thoroughbreds remains strong, with approximately 70% of sales to non-British buyers. The largest source of finance is from the UAE states, Saudi Arabia and more recently Qatar, and whilst some horses are exported the majority remain to be trained and raced in Britain.
Whilst it is clear the lower end of the market is challenging, as with other leisure pursuits - top class sport is increasingly funded by wealthy individuals/ organisations. Such investors appear increasingly willing to develop showcase facilities further widening the gap between the best and more modest facilities.
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.
Determination of stud relief: Paragraph 2A(1) Schedule 6 LGFA 1988
It is essential that relief should only be applied to actual buildings used for ‘stud purposes’. Buildings at stud farms used for other equine purposes do not qualify for relief.
The principal guidance on Stud Farm Relief is given in Rating Manual: section 6 part 1 - section 1005:3 and within Appendix 1.
For R2017 there is currently no published intention to alter the current arrangements, which are as follows:
- The non-domestic rating (Stud Farms) (England) Order 2009 SI 2009 No. 3177 which states that up to £4,700 relief may be applied where appropriate. The position in Wales has not altered.
For the avoidance of doubt, this 2009 Order does not apply to the 2005 (or earlier) rating lists or any hereditament situated in Wales (where the lower limit of £2500 rateable value applies).
Analysis and adjustment
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).
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 relevant Specialist Equine Caseworker for the unit should be approached when dealing with both maintenance and settlement of this class.