The Non-Domestic Rating (Definition of Domestic Property) (Wales) Order 2016

EXPLANATORY NOTE

(This note is not part of the Order)

This Order amends section 66 of the Local Government Finance Act 1988 (“the 1988 Act”), which defines domestic property for the purposes of Part III (non-domestic rating) of that Act.

Section 66 of the 1988 Act also defines self-catering accommodation and provides that such accommodation is not domestic property. Article 2(2) of this Order amends that definition so as to add further circumstances in which a building or self-contained part of a building is self-catering accommodation and therefore is not domestic property.

Where a building or self-contained part of a building is let for at least 70 days during the previous year and the remainder of section 66(2BB)(a) to (c) has been complied with, the building or self-contained part of a building will continue not to be domestic property.

However the definition is amended so that where a building or self-contained part of a building is let for less than 70 days over the previous year as part of a business which lets a number of such buildings or self-contained parts of a building at the same location or within very close proximity of each other, it may nevertheless in some circumstances not be domestic property. Where the average number of days in which each of the buildings or self-contained parts of buildings at the same location or within a very close proximity of each other is let over the previous year is at least 70, each building or self-contained part of a building is not to be domestic property.

But a building or self-contained part of a building may only be included in one calculation in the relevant year. For example, buildings A, B and C, are let at the same location (and the remainder of section 66(2BB) has been complied with). Building A is let for 95 days and buildings B and C are let for 45 days each. Building A may be included in a calculation under section 66(2BB)(d)(ii) with either building B or C. The combined days let of buildings A and B, or A and C is 140 days, resulting in an average of 70 days, meaning that in either case, both buildings are not domestic property. The remaining building (not included in the calculation) does not fulfil the conditions and is therefore domestic property. If building A is included in a calculation with building B, building A cannot then be included in a calculation with building C.

Article 2(3) and (4) corrects a drafting error in section 66(2C).

The Welsh Ministers’ Code of Practice on the carrying out of Regulatory Impact Assessments was considered in relation to this Order. As a result, a regulatory impact assessment has been prepared as to the likely costs and benefits of complying with this Order. A copy can be obtained from the Local Government Finance Policy Division, Welsh Government, Cathays Park, Cardiff, CF10 3NQ.