When selling your home, there are many important considerations, from setting the right asking price to ensuring your property is well-presented for potential buyers. One aspect that might come up during the process is the rateable value of your property. But what exactly is the rateable value, how do you find it, and how does it impact your sale?
In this guide, we’ll explain everything you need to know about rateable value and how it compares to market value when selling your property.
Related: Guide price: What does it mean and how it affects your sale
What does relatable value mean?
Rateable value is an estimated annual rental value of your property, calculated by the Valuation Office Agency (VOA) if your property were available to rent on the open market. This figure is used primarily to calculate business rates for commercial properties and council tax bands for residential properties. The VOA reassesses rateable values periodically, typically every few years, to reflect changes in the property market.
While residential homeowners don’t pay business rates, understanding your property’s rateable value can provide useful context about how your property is officially valued for taxation purposes.
Rateable value vs. market value: What’s the difference?
It’s easy to confuse rateable value with market value, but they serve different purposes. Here’s a breakdown of the differences:
Rateable value: This is the value of your property used for business rates, assessed by the Valuation Office Agency. It’s based on factors like location, size, and type of property. While it doesn’t directly determine how much you can sell your property for, it gives you a helpful indication of what your property is worth in terms of business taxation.
Market value: The market value is what you can expect to sell your property for, based on current market conditions. It’s determined by factors such as buyer demand, the condition of your property, and how much similar properties in your area have recently sold for. This is the figure that matters most when setting your asking price.
While both values are based on similar factors, rateable value is used for business tax purposes and won’t be the same as the market value when selling your home.
Related: The importance of a precise valuation
Why should you know your rateable value?
While rateable value isn’t something you’ll directly use to set your selling price, it’s still worth understanding. Here are a few reasons why:
Property taxes and business rates: If your property is used for business purposes, the rateable value will be used to calculate business rates. Understanding this can help you budget if you’re running a business from home.
Insight into property value: The rateable value can give you a helpful indication of how your property is valued, although it’s not a direct reflection of the market value. Still, it can provide useful context when considering your property’s overall worth.
Comparison with similar properties: If you’re wondering how your property compares to others in your area, checking the rateable value can offer some insight. However, for accurate pricing when selling, it’s best to rely on current market conditions and seek expert advice.
Related: The role of comparative market analysis (CMA) in pricing your home
How do I find the rateable value of my property?
Finding the rateable value of your property is straightforward and free of charge. The rateable value is essentially the value assigned to your property by the Valuation Office Agency (VOA) for business rates purposes.
While it isn’t directly related to how much you can sell your property for, it’s still useful to know.
Here’s how to do it:
Visit the VOA website: Head to the Valuation Office Agency’s website.
Enter your property details: Simply search by your property address to find the rateable value.
Review the results: The website will display the rateable value assigned to your property, along with other relevant details like the date of the last assessment.
It’s a straightforward process and free of charge, providing you with valuable information for understanding your property’s tax obligations.
Related: The landlord’s guide to tax return
How does rateable value impact the sale of my property?
While the rateable value itself doesn’t directly affect your sale price, it can have some indirect effects:
Impact on buyers: If your property has a high rateable value, it could indicate a larger or more valuable property, which might be appealing to buyers. However, it’s the market value that will determine your asking price and the final selling price.
Potential for higher business rates: If the property is used for commercial purposes, the rateable value directly impacts the business rates. Buyers interested in a property for commercial use will likely consider the rateable value when making their offer.
Energy efficiency and property value: A property’s rateable value can sometimes be influenced by factors like energy efficiency. As environmentally conscious buyers become more prevalent, properties with higher energy efficiency ratings can often command higher market values.
Related: How to set the right asking price for your property
Get expert guidance from Ellis & Co
Finding and understanding your property’s rateable value is a straightforward process and can provide useful context when selling your home. While it’s not the figure you’ll use to set your asking price, it can offer helpful insight into your property’s value and potential tax implications.
If you’re looking to sell, it’s always best to focus on the market value, which is influenced by factors like buyer demand and local property prices. To achieve the best price for your home, make sure you have the right support and expert advice.
If you need assistance with the selling process or have any questions about pricing your property, contact your local Ellis & Co branch today.
