Member News

IPTI | Update on U.S. & EU Property Tax Issues: July 2021

The EACC, in partnership with the International Property Tax Institute (IPTI), wants to keep its members up to date with the latest developments in property taxes in the USA and Europe. IPTI has put together below a selection of articles from IPTI Xtracts; more articles can be found on its website (www.ipti.org).

UNTIED STATES OF AMERICA

New York: Local property taxes to be capped at 2% next year

Local government property taxes in New York next year will hit their statutory cap of a 2% increase, state Comptroller Tom DiNapoli on Wednesday announced. It’s the third time in the cap’s decade-long history that local governments will have property levies limited to a 2% increase. The 2011 law limits property tax increases at 2% or the rate of inflation, whichever is lower. Local governments can also override the cap if they choose.

DiNapoli’s announcement affects all counties, towns and fire districts in the state, as well as 44 cities and 13 villages that operate their budgets on a calendar-based fiscal year. The 2021 limit was set at a 1.56% increase.

“Allowable tax levy growth will be limited to 2% for a third time in four years for local governments with calendar fiscal years,” DiNapoli said. “As the economy recovers from the pandemic, local governments have seen some revenues rebound and have benefited from one-time federal financial assistance. At the same time, the risk of inflationary cost increases and the need for investments that will stimulate economic growth and fund essential services may lead to challenging budget decisions ahead.”

New York: ‘Value capture’ is the infrastructure pay-for everyone is missing

The bipartisan infrastructure framework endorsed by President Biden in late June includes a remarkably diverse collection of revenue sources, ranging from boosted IRS enforcement to crackdowns on unemployment benefits fraud. With so many “pay-fors” that are completely unrelated to infrastructure, the proposal seems to ignore the very premise of the latest legislative push: Infrastructure provides large returns on investment. Tapping into the new value created by infrastructure projects, a funding mechanism called “value capture” should be part of the conversation as federal legislation takes shape.

Expensive transit projects in big cities often demonstrate the promise of value capture most clearly. The Second Avenue subway expansion in New York City, for example, has cost $1.7 billion per kilometer — far more than recent subway construction around the world. I recently found, alongside co-authors Stijn Van Nieuwerburgh of Columbia and Constantine Kontokosta of New York University, that the project lowered commute times and raised the value of local real estate dramatically. In fact, as I detail in a recent policy brief for the Manhattan Institute, the increase in land value alone would have been enough to pay for the entire subway construction.

The problem is that existing government financing methods leave this value largely untouched. We estimate that New York City will recoup less than a third of the real estate value generated, while the rest is a windfall for private developers who just happened to own land in the vicinity of the subway stops. Local governments around the country will find that infrastructure improvements constructed in isolation will cost taxpayers enormous amounts while enriching local property owners.

Value capture helps address this problem. Urban governments tax the incremental property gains resulting from infrastructure improvements in order to finance their construction, making public investment more fiscally responsible and more equitable. Meanwhile, taxing the surplus windfall that accrues to local landowners leaves landowners no worse off than they were before, while providing funding to finance essential projects.

So far, the U.S. has not been receptive to value capture’s virtues, with many infrastructure projects in American cities amounting to huge cost sinks. But successful projects in cities across the world can offer instructive models for American policymakers. Hong Kong and Tokyo, for example, feature privately-run subway companies that actually turn a profit. These transit systems develop real estate in the vicinity of subway stops, thereby internalizing the value uplift from new infrastructure and providing substantial operating profits for these companies. The viability of purely privately-operated infrastructure companies in Asia presents a stark contrast to costly public-sector projects in the United States.

Most of the time, value capture techniques do not even require this sort of privatization. Both the Hudson Yards project in New York and Crossrail in London charge incremental levies to properties in the area in order to help finance important infrastructure improvements. They also incentivize additional transit-oriented development in the vicinity of transit stops, with the additional incremental taxes going to fund infrastructure expansion.

Politicians and affected residents often forget that value capture does not impose another tax added to the cost of doing business in a given region. Value capture levies are closely tied to specific infrastructure expansions and improvements that directly benefit local property owners. Charging for up-zoning rights provides builders with concrete benefits in the form of higher development rights, while targeting dense construction in transit-rich areas.

It is also important to remember that value capture does not add new taxpayer burdens; it just makes them more targeted. By supporting the construction of infrastructure projects, cities incur expenses that ultimately will need to be paid back, one way or another. Value capture simply ensures that the people who benefit most from the project wind up paying, rather than taxpayers as a whole — many of whom will never benefit from the project in question.

Focusing the financial burden of infrastructure projects on their primary beneficiaries has bipartisan promise at a federal level. Republicans and Democrats support infrastructure investment because a new project can bolster economic activity, improve quality of life, and connect citizens to greater opportunities. Increased real estate values in a neighborhood or region very closely reflect this return on investment.

Capturing this new value — which most often benefits the wealthy and corporations (the taxation targets of President Biden’s original funding proposal) — should appeal to Democrats. Republicans also might be refreshed to see that $110 billion of investments in public transit and rail would be paid for by the specific stakeholders who reap the rewards, not taxpayers in rural states who are less likely to benefit. State and local governments, which are poised to play a major role in the bipartisan framework, could coordinate with the federal government to apply value capture to eligible projects under new legislation.

America desperately needs new transit and transportation infrastructure, and Congress urgently needs innovative, substantive ways to pay for it. With economists questioning the projections of revenue generated from IRS funding boosts, unemployment fraud reductions, and vaguely described public-private partnerships, now would be the right time for policymakers to look to value capture. At its root, value capture recognizes that infrastructure investment builds brighter cities and more prosperous communities — and harnesses that progress for the public good. That seems like something we can all get behind.

California: L.A. County Property Assessments Rises to $1.76 Trillion

Continuing an 11-year upward trend, the Los Angeles County Assessor’s Office today reported that Los Angeles County’s property is valued at $1.76 trillion, a 3.7% increase from last year.

The $1.76 trillion Assessment Roll is $62.9 billion more than last year’s valuation of $1.7 trillion, the Los Angeles County Assessor Jeff Prang said.

“I am pleased to report that the 3.7% increase in assessed property values in Los Angeles County represents the 11th year of consecutive growth,” Prang said. “We continue to improve our ability to produce a fair, accurate and timely Assessment Roll, which is aided in large measure by new, enhanced technology.”

The county’s property valuation translates to about $17 billion in property tax dollars to fund public education, first responders, public health and other county, municipal and public education services. Property sales contributed $44.9 billion to the Assessment Roll, new construction added $8.8 billion and the Consumer Price Index adjustment mandated by Proposition 13 added $16.4 billion. About 90% of property owners saw about a 1.036% adjustment from Proposition 9.

The assessment includes 2.58 million real estate parcels and business assessments, including 1.885 million single-family homes, 250,190 apartment complexes, 248,293 business property assessments and 161,488 business property assessments.

While overall property value grew, business personal property — including machinery, equipment, boats and aircraft — decreased by $5.5 billion, reflecting the impact that COVID-19 had on small businesses. Reduced air travel resulted in reduced aircraft assessments, and stay-at-home orders created reduced fuel demand that lowered the price of fuel, causing major refineries to experience a decrease in net cash flow and a reduction in fixture value, according to Prange.

“Although the 2021 Assessment Roll reflects growth, which is good news, other factors are now indicating the exact nature of the economic slow-down caused by the COVID-19 pandemic,” Prange said. “The mixed implications of this past year will be felt for some time to come. Just as an example, the housing market experienced robust growth during the pandemic while small businesses were hit hard along with hotels, refineries and airlines.”

According to Prange, the Los Angeles County Assessor’s Office faced difficulty producing the Assessment Roll amid the COVID-19 pandemic, as county facilities were closed to the public and staff worked remotely.

“Most of my 1,300 employees were teleworking while county facilities were closed to the public,” he said.

“This past year has been beyond a challenge but we pulled together and have produced a thorough, accurate and fair Roll in a timely manner.”

Illinois: Reform-minded assessor tackles Chicago valuations and clout

Business groups are nervous as Fritz Kaegi, citing evidence of longstanding inequities, reviews assessments citywide. Cook County Assessor Fritz Kaegi needs to deliver on promises this year. Owners of more expensive properties in the city, whether the business or residential variety, worry they’ll foot the bill for those promises.

Business lobbyists have been sounding the alarm about a spike in commercial and industrial assessments. Jack Lavin, the head of the Chicagoland Chamber of Commerce, has said property tax hikes and other factors could shock the region into a recession.

Developers have warned that investors are bypassing Chicago because of property-tax anxiety, although you wouldn’t know it from the volume of projects and zoning changes sought for hot districts such as Fulton Market or the Near North Side.

Tensions are ratcheting up because Kaegi, elected in 2018 as a reformer, has his first crack this year at reassessing property values within the city of Chicago. It’s his biggest test, and he must face it while fixing errors in the program granting assessment freezes for certain seniors, an issue the Sun-Times has revealed.

Cook County parcels are reassessed on a three-year cycle, and this year is the city’s turn, with changes showing up on next year’s bills. Kaegi, in an interview, said the labyrinthine system here benefits the big players despite his progress.

“The greatest shortfall, the greatest area we are addressing is this Chicago commercial undervaluation, especially on the bigger properties relative to the smaller ones,” Kaegi said.

A study of 2018 assessments by the International Association of Assessing Officers found that under Kaegi’s predecessor, Joe Berrios, commercial properties in the city were undervalued by nearly 50%. Across the county, the report found the undervaluation at almost 40%.

Homeowners and landlords would have made up the difference. But the residential side isn’t off the hook in Kaegi’s world. He said data show owners of higher-priced homes often get an undeserved break.

Also, his office’s work this year is picking up the higher housing prices in many neighborhoods stemming from a pandemic buying binge. Property owners in Rogers Park Township were the first in Chicago to get their assessment notices, and some hikes are steep.

Kaegi’s staff is working through the city’s seven other townships, divisions with no importance other than at tax time. Properties in West Township, which runs from the West Loop to the city limits, will receive notices soon, Kaegi said. It will be an early indicator for other parts of downtown, where notices will hit later this year.

The office, he said, is on schedule with the property reviews but is late sending notices because it is porting data to a new system and wants to get everything right. The changes come in the name of transparency and service. Kaegi said he’s aiming for valuations that are fair and, importantly for investors, predictable.

“We have changed a culture that was really sick,” Kaegi said, citing prior assessments set with little justification. “It was all a black box,” he said.

Since taking office, he has instituted an ethics code for employees, published visitor logs and tried other ways to rein in clout.

“We’ve anonymized commercial [assessment] appeals, so that our analysts do not see the identity of the lawyer or the building owner. They’re just looking at the data when they are considering the appeals,” he said.

“We show all the valuation drivers that we use not only because we think transparency is good, but it makes us accountable.”

Kaegi said he’s making changes people want. “The public does not understand our assessment system. They understand what was wrong with it. The black box is dead.”

But it can seem like Kaegi is wrestling a dragon called The System. Beyond his office, there are three other avenues to appeal an assessment. The most common one is the three-member Cook County Board of Review, heavily used by commercial landowners.

Many hire politically connected lawyers, such as Ald. Edward Burke (14th), who saved former President Donald Trump $14 million on taxes for his Chicago tower, the Sun-Times found. Former Illinois House Speaker Michael Madigan also is big in the field.

His firm, Madigan & Getzendanner, had a hand in a property Kaegi cited as an example of what he’s up against. A 21-story apartment building in Oak Park, Vantage Oak Park, sold for $102 million to a partnership involving Goldman Sachs in 2018. Kaegi’s office valued it at $90 million in 2020. The Board of Review sliced that to $54 million.

Jeffrey Holland, the attorney who represented the property, said the board’s valuation accounted for comparable properties nearby and the building’s expected income. The case sticks out in his mind, Holland said, because “the assessor’s valuation was way off base.”

Kaegi said he plans to run for re-election next year to continue attacking a system tilted toward special interests.

“Some of them were doing pretty well by hiring an insider, getting an assessment which they know very well was completely having nothing to do with the market value of their property,” he said. “There are a lot of people who want to keep that in place.”

Pennsylvania: What you need to know about countywide property reassessment

A lot has happened since 1994. The country has witnessed seven presidential elections. An entire generation was born, grew up and entered adulthood. Technology has advanced by leaps and bounds. The internet went from a novelty to something most people use daily with small devices they can fit in their pockets or purses.

And development has trudged on, with new housing developments and shopping centers and office buildings and warehouses permanently changing the landscape. One thing that hasn’t happened over the last 27 years? Berks County hasn’t done a countywide reassessment of properties.

Counties across Pennsylvania assess the values of properties as a way to determine how much property owners have to pay in property taxes. That includes taxes levied by the county, local municipalities and school districts.

Each of those entities sets its own property tax rate, which is then applied to the assessed value of a property to calculate tax bills. According to the state constitution, that has to be done uniformly. The process has to be fair.

To achieve that, counties use what is called a “base year.” That is a year when the county goes out and officially assesses the value of all properties. The last time that was done in Berks was 1994, which means tax calculations are done based on property values in that year. Of course, a lot of houses and other buildings have been constructed since then.

For properties that have been developed since 1994 — or those whose owners challenge the assessment through the county boards of assessment appeals — a calculation is made to equate today’s home values to those from 1994. That calculation is done using a ratio called the Common Level Ratio that is set each year by the state Tax Equalization Board.

In Berks the CLR for 2021 is 1.78, which means that property values are assumed to be about 56% higher now than 27 years ago. If a countywide reassessment is done, it resets the base year and all properties get an up-to-date assessment. While the process is expensive and labor intensive, it can lead to a more fair distribution of the tax burden by accounting for appreciation and depreciation of properties that has occurred since the previous base year.

But in Pennsylvania, there is no rule about when reassessments have to happen or oversight about whether those assessments are outdated and unfair. It is one of only a handful of states that doesn’t regulate reassessments.

The result is a county-by-county patchwork, with some counties using base years dating to the 1960s and others with much more recent base years. Some have regularly scheduled reassessments, and others completely avoid the endeavor decade after decade.

Berks, with its 1994 base year, ranks in the bottom third when it comes to how long it’s been since it last did a countywide reassessment.

Why is reassessment important?

There is a push in Pennsylvania to change the reassessment system. A handful of groups, representing both ends of the political spectrum, are lobbying the state to create rules for countywide assessments, taking the decision out of the hands of county officials.

They have also pushed for reassessments on a county-by-county basis, supporting court challenges seeking to force individual counties to reassess. Many of those challenges have been successful, including in Chester County in the late 1990s and, more recently, in Delaware County.

Marielle Macher, executive director of a nonprofit public interest legal aid organization Community Justice Project, is involved in two such challenges in Schuylkill and Lackawanna counties. A countywide reassessment has not been done in Schuylkill since 1996, and in Lackawanna the last time one was done was 1968.

Macher said doing reassessments ensure that taxes are levied fairly. “As you pull further and further away from the base year, property values change,” she said. “Some properties depreciate and other properties appreciate. And it tends to be lower valued properties that change more slowly, so that has an adverse effect for those homeowners because they tend to shoulder a disproportionate share of the tax burden.”

Macher said that failing to reassess results in a regressive tax system in which owners of lower valued properties are being asked to pay more than those who have higher valued properties.

“Keeping the way it is hurts overassessed property owners,” she said. “As an organization that advocates for the rights of low-income Pennsylvanians, we view it as very problematic that the owners of lower valued homes are paying more in taxes.”

Along with her involvement in challenges in individual counties, Macher is also pushing for a systemic change at the statewide level. When her organization brought the challenges against Schuylkill and Lackawanna counties, they included language calling for the implementation of a statewide standard.

The challenges in Schuylkill and Lackawanna are not the first time the Community Justice Project has pushed for a reassessment. The organization was instrumental in bringing a lawsuit against Allegheny County more than a decade ago that worked its way through the court system and eventually resulted in a loss for the county. That decision was one of many that have been handed down by the courts.

In fact, many county officials have only undergone the reassessment process after a court found that they were in violation of the uniformity clause in the state constitution. The constitutional imperative of uniformity means that it becomes necessary to periodically step back and look at every property in order to ensure that the burden of taxation is properly distributed.

But Eric Montarti, research director of the Allegheny Institute for Public Policy, said there is no uniformity in how or when counties do that. “There is no consistency or predictability in Pennsylvania when it comes to reassessment,” he said, adding that the assessment process in Pennsylvania seems out of step compared to other states.

Montarti said his organization has researched the topic extensively because of the implications reassessment brings. He pointed out that assessments have a big impact on property taxes, which are the primary source of revenue for local governments, and that the consequences of not keeping values at market rate can be monumental for some homeowners.

Instead of letting counties handle reassessments on their own, Montarti said a far better public policy approach would be a legislatively mandated regular reassessment regimen that would meet state constitutional standards.

“Somehow other states are able to do this and not have a huge problem,” he said. “But, here, because the law permits counties to have outdated assessments as long as they are using that same value for everyone there is no urgency.

“It is time for the Legislature to fix this problem. It is a detriment to the state to be so far out of step with sound and fair taxation policies practiced in almost all other states. Every year of delay exacerbates the difficulties in a reassessment process for counties that are decades out of date.”

The state has taken a look at reforming the reassessment process. But the Property Assessment Reform Task Force, a project of the state Local Government Commission, concluded a study in June 2018 that has not led to any concrete changes.

“This was the last statewide effort to look at this issue and it was basically decided to leave it up to the counties,” he said. “The report stated that they knew the state was out of step compared with other states and outlined the problems with having an outdated base year, but they stopped short of recommending that the Legislature set a standard.”

Lisa Schaefer, executive director of the County Commissioners Association of Pennsylvania, served on a subcommittee of that special commission. She was a member of a group that crafted a guide for counties to help them determine if they’re meeting state constitutional requirements for fairness and equity by ensuring taxpayers only pay their fair share of property taxes.

The guide provides information about requirements and identifies key factors that may affect the fairness, equity and accuracy of property values in the county and influence the need for a countywide reassessment. It also discusses steps the county may take to obtain additional information, the readiness of the county to conduct a reassessment and ways to support the property assessment office efforts to assure fair assessments.

Schaefer said that simply having an old base year doesn’t necessarily equate to a need for doing a reassessment. “The important thing to note is that the point of a countywide assessment is to make sure property values are uniform compared to one another,” she said. “So time is not necessarily the only factor that impacts uniformity.

“For instance, you could have a county where there hasn’t been much growth. There are so many factors like the economy, the marketplace, the readiness of the county to undertake the process. That all falls into the conversation.”

One of the big factors counties have to think about when considering a reassessment is the cost of the process. It often requires a large amount of time and staff, as well proper software systems to collect and analyze data. Another challenge is that reassessments are often unpopular with the public, many of whom fear they will see their tax bills skyrocket.

“This can be a very contentious process,” she said. But Schaefer pushed back on the notion that property owners will see their tax bills rise, noting that previous assessments show that about a third of property values will increase, a third will stay the same and a third will decrease.

That’s because revenue from property taxes has to remain neutral the year a reassessment goes into effect. It can’t be used as a way to hike the stream of tax dollars.

Every governing board — the county, municipality and school district — has to adjust its millage rate following an assessment so that the new rate keeps revenues neutral. So just because your value changes does not mean your tax bills are going to change.

“I think there is a lot of consternation and anxiety that comes with this, but counties need to have a good public relations team in place to communicate that to people,” she said.

Schaefer said her organization advocates that the decision to reassess comes from the county rather than the state. She said she feels county officials are in the best position to identify the needs of their communities.

“This is a learning process for everyone that goes through it,” she said. Montarti agreed there is often a misconception among taxpayers about the impact of a reassessment. In many cases, he said, property owners assume their taxes will increase at the same rate as their assessment increase. But because tax rates have to change as well, it’s not that simple.

“They don’t understand that the overall reassessment, when the value comes together, has to be revenue neutral,” he said. “That doesn’t mean that someone who is underassessed won’t pay more in taxes, but that person needs to look at what has gone on in the county, the municipality and in the school district.”

Montarti said there could be a property whose value has increased faster than the rest of the county, municipality or school district. That property will likely see a larger than average tax increase.

But there could also be a property that, while increasing in value, did so at a slower rate than other properties in the area. That property will likely see a small tax increase, or perhaps even a decrease, when tax rates are adjusted. Still, Montarti said, the fact that some property owners will see tax increases after a reassessment has led many county leaders to shy away from taking on the task.

“The politicians are reluctant to do it because they know there will be some sticker shock,” he said. “There is a lot of angst and misunderstanding around this issue, and it falls to the county to help communicate to people that a higher property value does not necessarily mean higher taxes.”

EUROPE

United Kingdom: Government plans could make it more difficult to appeal business rates

Forecourt owners could find it more difficult to appeal their business rates if proposals contained in a Government consultation are carried out. Under the plans, revaluations of non-domestic properties would take place every three years instead of the current system of five to ensure they better reflect changing economic conditions. The proposals set out in a government consultation will form one part of its Fundamental Review of Business Rates, which will be published later this autumn.

“The PRA is concerned that the move will be detrimental to members on the assessment of their businesses valuation and make for a more bureaucratic appeals process. This could then make it more difficult for members to appeal their business rates,” said Gordon Balmer, executive director of the PRA.

“While we support the move to more frequent revaluations and streamlining the complex business rates appeals system, we are concerned the Valuation Office Agency (VOA) will not have the capacity to deal with the proposed changes.

“We are currently in discussions with members on how these reforms will affect their businesses and will be responding further to the proposals in due course.” Announcing the consultation, financial secretary to the Treasury Jesse Norman said: “As our economy is recovering, we are supporting businesses to build back better.

“Proposals set out in this consultation would mean that valuations more quickly reflect how the economy is performing, making the business rates system more accurate and responsive, while balancing the burden for ratepayers.”

United Kingdom: Retailers face high business rates bills over failure to respond to revaluation

The VOA fears businesses that closed in lockdowns may mistakenly think they do not need to submit rental information. Retailers could end up paying over the odds on business rates after the next adjustment to the tax, because not enough are engaging with a revaluation process.

The Valuation Office Agency, which collects information on shop rents used to calculate rates, has expressed concern that too few businesses are providing details. It’s worried it could mean rates bills from 2023, when the adjustment takes effect, will not reflect the impact of the pandemic on rent values, and is urging more businesses to respond.

The agency began writing to businesses to collect rental information for the latest revaluation early last year but paused between March and October in acknowledgement of disruption caused by the pandemic. It now fears businesses that closed in lockdowns may mistakenly think they do not need to respond.

The VOA did not provide the response rate to the revaluation exercise but said evidence was building anecdotally within the agency that it was low. “We know the pandemic has had a significant impact on many businesses,” said VOA chief valuer Alan Colston.

“We need to do everything we can to make sure this is reflected at the 2023 revaluation and we have as much evidence as possible about the property market. “That’s why it’s really important that businesses submit their up-to-date rental information to make sure their rateable value and the business rates they’re charged are accurate.”

Businesses are given 56 days to respond to a VOA request for rental information, after which a penalty can be imposed. Reminders are also issued. Business rates have been repeatedly slammed as a disproportionate burden in the pandemic because rental values have plummeted since the last revaluation, in 2015. The tax is calculated at about 50p on every £1 of rent, but in May this year British Land told The Grocer rates had become the biggest property expense for many shopkeepers.

Last week, property agency Colliers also said business rates had become a bigger burden than rent for many retailers, citing an ex-Debenhams store offered for rent at £100,000 per year but with a £350,000 per year rates bill attached.

According to recent figures from the British Property Federation, retail rents outside London had already fallen by about 30% over the decade before the arrival of the pandemic, which has driven values down further amid soaring shop vacancy rates.

Colliers puts the decline in rental values at 50% in the past two decades, and estimates one in three UK shops are currently vacant, producing no income or occupied on very short-term arrangements.

United Kingdom: Valuation Office Agency accused of laying groundwork for delay to business rates revaluation

The agency said it had been writing to businesses since early last year, but had paused from March to October to acknowledge the disruption of the pandemic

The Valuation Office Agency has been accused of using retailers as a “scapegoat” for a possible delay or fudging of the next business rates revaluation.

The VOA this week expressed concern not enough businesses were submitting rent information needed for the next adjustment to the tax, due in 2023, to properly reflect the impact of the pandemic.

The agency said it had been writing to businesses since early last year, but had paused from March to October to acknowledge the disruption of the pandemic. It said it was now concerned businesses that closed in lockdown may not realise they needed to respond.

However, Colliers head of rating John Webber accused the agency of looking for a “scapegoat” to blame as its own processes faced disruption from the government postponing the revaluation, which will be based on rent values collected in 2021 instead of 2020.

“The valuation date was 1 April this year and I haven’t heard of anybody sitting on information,” said Webber. “Most big retailers will be supplying information through a well-trodden route of their agents sending it in bulk.

“This sounds to me like the VOA is looking for an excuse to either delay the revaluation – which would be disastrous for retail – or getting it badly wrong.

“If they’re really worried, they’d write to every agency in the country. This just smacks of looking for a scapegoat. Otherwise they wouldn’t have gone to the press, they’d come to people like us, or the BRC.

“The people who head the leisure sector at the VOA have contacted people [at agencies] directly, not only to get rental information but also a flavour for how the market has moved from pre-pandemic to today.”

BRC property policy advisor Dominic Curran also said he was not aware of the issue described by the VOA.

The VOA did not put a number on the shortfall in rent information from businesses but said evidence was building anecdotally withing the agency it was a concern.

“We know the pandemic has had a significant impact on many businesses,” said VOA chief valuer, Alan Colston. “So we need to do everything we can to make sure this is reflected at the 2023 revaluation and we have as much evidence as possible about the property market.

“That’s why it’s really important that businesses submit their up-to-date rental information to make sure their rateable value and the business rates they’re charged are accurate.”

Responding to Webber’s comments, a VOA spokeswoman said: “We are not suggesting that businesses are purposely sitting on information. A normal part of raising awareness around a revaluation is reminding businesses of the need to supply up-to-date rental information to us to make sure their rateable value and the business rates they’re charged are accurate.

“This is particularly important for many smaller businesses who aren’t represented by agents.”

Authors:

  • Paul SandersonPresident | psanderson[at]ipti.org
  • Jerry GradChief Executive Officer | jgrad[at]ipti.org
  • Carlos ResendesDirector | cresendes[at]ipti.org

Compliments of the International Property Tax Institute – a member of the EACCNY.