20.Article 4 gives effect to Schedule 2 to the Order.
21.Paragraph 1 of Schedule 2 to the Order defines the capital value of a property as the amount it would have reasonably sold for on the open market on 1 January 2005, based on a number of assumptions as set out in paragraphs 3 to 9 of that Schedule.
22.Paragraph 3 of Schedule 2 to the Order provides for the assumption that the property was sold with vacant possession.
23.Paragraph 4 of Schedule 2 to the Order provides for the assumption that the estate sold was the fee simple absolute or a 99-year lease in the case of a flat.
24.Paragraph 5 of Schedule 2 to the Order provides for the assumption that the property was sold free from rentcharges or other incumbrances, which means that they will not be reflected in the capital value of a property. However, by virtue of the definition of “incumbrance” in paragraph 2 of Schedule 2 to the Order, service charges will be taken into account in determining the capital value of a property.
25.Paragraph 6 of Schedule 2 to the Order provides for the assumption that the property was in an average state of internal repair and fit out, taking account of the age and character of the property. Paragraph 6 also provides that it will be assumed that the property was otherwise in the state and circumstances in which it might reasonably be expected to be on 1 April 2007.
26.Paragraph 7 of Schedule 2 to the Order provides for the assumption that the property had no development potential over and above that for which planning permission is not required or for which no application for planning permission is required.
27.Paragraph 8(1) of Schedule 2 to the Order provides that where a property is a dwelling-house, a private garage or private storage premises or although vacant is deemed to be such a property under Article 3(2) of the Order, it will be assumed that it will always be such a property. Similarly, it will be assumed that where a property is used partly for the purposes of a private dwelling and partly for other purposes or although vacant is deemed to be so used under Article 3(2), it will always be so used.
28.Paragraph 8(2) and 8(3) of Schedule 2 to the Order provide that where a house is occupied in connection with agricultural land or a fish farm and used as the dwelling of a person whose primary occupation is the carrying on of or directing of agricultural or fish farming operations on the land or fish farm or a person employed for these purposes, it will be assumed that it will always be so used.
29.Paragraph 9 of Schedule 2 to the Order provides for the assumption that there has been no contravention of any legal obligation, whether arising under legislation, an agreement or otherwise, which would affect the capital value of the property.