1.1 This Practice Note explains the law and the circumstances which will require:
(a) The pitch for a caravan or the mooring for a boat to be banded for Council Tax purposes; and
(b) The value of the caravan or boat itself to be reflected in the Council Tax band.
1.2 The contents of this Practice Note have been discussed with representatives of the Residential Boat Owners Association, and the Dutch Barge Association.
1.3 Appendix C and D contains a number of examples which are referred to in the text.
1.4 A caravan is defined in section 66(7) LGFA 1988 by reference to Part 1 of the Caravan Sites and Control of Development Act 1960. This definition is attached at Appendix B of this Practice Note. There is no definition of “boat” for the purposes of this legislation.
2.1 In order to be subject to Council Tax, property must conform with the statutory definition of a dwelling contained in Section 3 of the Local Government Finance Act 1992 (LGFA 1992).
2.2 A dwelling is defined in Section 3(2) as:-
Any property which -
(a) By virtue of the definition of hereditament in section 115(1) of the General Rate Act 1967, would have been a hereditament for the purposes of that Act if that Act remained in force; and
(b) is not for the time being shown or required to be shown in a local or central non-domestic rating list in force at that time; and
(c) is not for the time being exempt from local non-domestic rating for the purposes of Part III of the LGFA 1988.
2.3 This means that, in order to be treated as a dwelling and assigned a Council Tax band, a pitch or mooring has firstly to be a hereditament and then secondly has to be domestic property.
2.4 Domestic property that is part of a composite hereditament will also be subject to Council Tax (Section 3(3) LGFA 1992).
3.1 Domestic property is defined in Section 66 LGFA 1988.
3.2 The Rating (Caravan and Boats) Act 1996 amends Section 66(3) & (4) with effect from 1 April 1990 so as to clarify when a caravan pitch or a boat mooring comprises domestic property. A copy of the relevant sections of the Act is attached to this Practice Note as Appendix A.
Broadly, a caravan pitch or boat mooring is domestic property when either:
3.3 Caravan pitches and boat moorings which when next in use will be domestic property
S.66(5) of the LGFA 1988 provides that,
“Property not in use is domestic if it appears that when next in use it will be domestic”
Therefore a pitch or mooring which has no caravan or boat situated on it will not constitute domestic property, unless it forms part of a larger hereditament which itself is domestic property ie. house and grounds, or unless it is clear that when next in use this will be as the pitch for a caravan, or mooring for a boat, which is a sole or main residence. The most obvious instances when this is likely to occur are in the cases of marina and canal bank moorings occupied by mobile residential boats, a showman’s winter quarters or a gypsy caravan site. Where it is unlikely that the pitches or moorings will be occupied with a sufficient degree of permanence for each to form a hereditament in its own right, the hereditament will be the whole site in the occupation of the site operator/owner of the moorings.
If a caravan and pitch which has been occupied as a sole or main residence becomes unoccupied it will nevertheless continue to be classed as domestic property (and therefore a dwelling) if, when next in use, it will form the sole or main residence of an individual. Accordingly, where a caravan sited on a residential caravan park is vacated and placed on the market for sale the entry should usually remain shown in the Council Tax Valuation List. The same will apply to mobile residential boats sold on their moorings when the status of domestic/non domestic property may need to be re-examined.
It is not considered that a caravan brought to a pitch or a boat to a mooring should be regarded as a dwelling unless it is clear that its use will be as a sole or main residence. The property should be regarded as non-domestic and liable to be included as a separate hereditament in the rating list or as part of a larger hereditament.
4.1 A hereditament is defined in Section 115(1) GRA 1967 as:-
“property which is or may become liable to a rate being a unit of such property which is or would fall to be shown as a separate item in the valuation list.”
4.2 Therefore the question to be considered is:
“would a pitch for a caravan or mooring for a boat fall to be shown as a separate item under the old rating law.”
4.3 The identification and definition of a hereditament has been considered by the Courts on a number of occasions (see Rating Case Index Part A Section 2) and reference can usefully be made to Field Place Caravan Park Ltd and Others v Harding (VO) 1966 CA RA 293 and Gilbert (VO) v S Hickinbottom & Sons Ltd 1956 CA 49 RIT 231 in particular.
Although a mooring or caravan pitch may not be self contained because of shared services or facilities, it may still comprise a hereditament which would have been rateable under the General Act 1967. The issue of 'self-contained' arises from the disagreggation/aggregation provisions of the Council Tax (Chargeable Dwellings) Order 1992 (see below).
4.4 Land, which comprises either the pitch of a caravan or the mooring for a boat, may constitute a separate hereditament in its own right, with or without the caravan or boat. If the caravan or boat is not treated as part of the hereditament then the pitch or mooring alone is the “dwelling” and is banded accordingly. If the caravan or boat is included because it is regarded as sufficiently permanent, then both the pitch and caravan or the mooring and boat are included in the valuation for banding. (See para 5 below).
4.5 In the case of a mooring the hereditament will comprise the precise area of land (whether covered with water or not) occupied by the boat and to which the root of the mooring is actually attached together with the “mooring gear” itself (ie piles, weights, chains, pontoons etc) if this fulfils the requirements of rateability. (See Rating Manual 5:670:4). The pitch or mooring will include any garage yard, outhouse or other appurtenance belonging to or enjoyed with them as domestic property.
4.6 There must be actual beneficial exclusive and non-transitory occupation of the caravan pitch or mooring but in some cases where there is prima facie evidence of rateable occupation it may not be easy to discern who is the occupier for council tax purposes, and accordingly what the correct unit(s) of assessment should be. Investigation will be necessary to determine whose occupation is paramount.
4.7 Paramount occupation is a question of fact in terms of the nature of the occupation and it is important that as much information as possible is obtained. Guidance as to the general principles to be observed is to be found in the House of Lords decision in Westminster City Council v Southern Railway Co (1936) (dealt with in Ryde on Rating and the Council Tax B (113) et seq).
In Lord Russell's words in that case
"The effect of the alleged control upon the question of rateable occupation must depend upon the facts in every case; and in my opinion in each case the degree of control must be examined, and the examination must be directed to the extent to which its exercise would interfere with the enjoyment by the occupant of the premises in his possession for the purposes for which he occupies them, or would be inconsistent with his enjoyment of them to the substantial exclusion of all other persons."
This was approved in the Field Place Caravan Park case.
4.8 In certain cases arguments have been put that occupation is not exclusive because licences are not stated to be exclusive and/or contain clauses requiring moorings to be vacated upon the occurrence of certain events. What is important, however, is what happens in practice. Occupation will be exclusive if the character of the occupation is such that it does in fact exclude others from using the land in the same way (and it doesn’t matter that in some remote circumstances another person might also use the land). Unless there is substantial interference with the enjoyment of the land by the occupier for his or her own particular purposes that occupation will be sufficiently exclusive. In some cases the degree of control exercised by the owner eg mooring in a marina, is such that the owner will be in paramount occupation.
It should not be accepted that after a boat has left the mooring legal possession of that mooring (invariably) rests with the owner of the mooring. This will depend on the terms of the licence and the circumstances in each case.
4.9 From a practical point of view it will often be the presence of a caravan or boat on a sufficiently permanent basis which will enable the pitch or mooring to be identified as a separate hereditament.
See Appendix D for examples.
4.10 If the caravan or boat does move away from time to time but the pitch or mooring is reserved for its return this could constitute a seasonal occupation as in Gage v Wren (1903 67 JP 32) and Southend on Sea v White (1900 65 JP 7) and provided the other tests of rateability are fulfilled then the pitch or mooring may still constitute a separate hereditament. See Appendix C example 2.
5.1 Technically the boat or caravan is a chattel which will only become part of the hereditament if its presence has a sufficient degree of permanence to the land.
5.2 In London County Council v Wilkins (VO) 1954 (HL) the question of whether a chattel was rateable was considered. Lord Kilmur said that the test of rateability was whether there is evidence that the structures were enjoyed with the land and enhanced its value. He concluded that,
“A chattel to be rateable must be rateable with the land on which it rests”.
5.3 The rateability of a caravan was specifically considered in Field Place Caravan Park Ltd v Harding (VO) 1966 (CA) when Lord Denning said,
“Although a chattel is not a rateable hereditament by itself, nevertheless it may become rateable together with land, if it is placed on a piece of land and enjoyed with it in such circumstances and with such a degree of permanence that the chattel with the land can together be regarded as one unit of occupation.”
The Court of Appeal held that the caravan and its pitch were rateable as a separate hereditament notwithstanding the fact that the caravan was a chattel on wheels (and could be moved within half an hour) because it was placed on and enjoyed with land and with such a degree of permanence that the two could together be regarded as one unit of occupation.
5.4 The boat or caravan does not have to be annexed to the land, it is sufficient for either to rest on the land or water by its own weight (see Ryan Industrial Fuels Ltd v Morgan (VO) 1965 RA 327). Nor is it essential for a boat to be attached vertically to the land under the water on which it rests.
5.5 There have been a number of cases in recent years which have considered whether floating hereditaments used for commercial purposes should be assessed (notably Woodbury (VO) v The Yard Arm Club Ltd LT 1989 RA 381 and Westminster City Council v Woodbury (VO) and The Yard Arm Club Ltd CA 1992 RA 1), but the main issues in these cases have focused on the adequacy of the description/exemption rather than rateability of the vessel.
5.6 For a chattel to be part of the hereditament it must be enjoyed together with the land. Land can include water eg above a river bed, canal or dock basin or a lake as in Thomas (VO) v Witney Aquatic Co Ltd 1972 RA 493.
5.7 Whether a boat has its own means of propulsion or has to be towed into position does not affect whether it forms part of the hereditament and is to be included in the Council Tax valuation banding.
5.8 Accordingly where a caravan or boat is enjoyed with the land, and this enjoyment is of a non-transitory nature, the two together form a single hereditament (as defined in Section 115 of the General Rate Act 1967).
5.9 Other Case law on transience
LCC v Wilkins [1957] AC 362 [1956] IRRC 88
Four builders huts, three in position for 18 months and the fourth for 20 months were rateable.
Bradshaw v Davey [1952] 1 All ER 350
Mooring for a yacht put down in summer and taken up in winter was not rateable.
Tavell and Sons v Buckingham (V)) (1963) 10 RRC 123 LT
1 year was sufficiently permanent for the rating of a caravan site.
Moore v Williamson (VO) [1973] RA 172 LT
4/5 months too transient for the occupier of the caravan to be rated in respect of his occupation - owner in paramount and permanent occupation.
6.1 The policy that the legislation is intended to achieve can be summarised as follows. Although this specifically refers to boats and moorings the same principles apply to caravans and their pitches.
a) If a boat which is someone’s sole or main residence is moored “permanently” at a mooring, then the mooring is domestic property, and both the mooring and the boat are subject to Council Tax.
b) If a boat which is someone’s sole or main residence stops at a mooring and moves away for a sufficiently long period (see 6.2), and it seems that when next in use that mooring will be used by that same boat or another boat which is someone’s sole or main residence, then the mooring is domestic but the mooring only is subject to Council Tax.
c) If a boat which is someone’s sole or main residence is moored at a mooring and moves away, and it seems that when next in use the mooring will be used by a non-sole or main residence boat, then the mooring is non-domestic and subject to non-domestic rates.
d) If there is a mooring with no way of telling what sort of craft will be moored at it, then it is non-domestic and subject to non-domestic rates.
6.2 Whether occupation by a boat or caravan, used as a sole or main residence, of a mooring or pitch can be treated as sufficiently permanent is a question of fact and degree. As a general rule, where a dwelling boat or caravan occupies a mooring or pitch for a substantial period of time - such duration would usually be for 12 months or more - it should be entered in valuation list, even if it moves away for brief periods of say 2 to 4 weeks, provided it then returns to its original mooring or pitch. The question to be asked is whether the occupation can be characterised as that of a 'settler' or a 'wayfarer'. If the latter, then only the mooring or pitch should be valued.
6.3 Even if the sole or main resident of a caravan or boat does not have exclusive rights to a particular pitch or mooring if, in practice, the caravan or boat occupies the land with sufficient permanence it will be classed as domestic property, and the value included in the Council Tax banding.
7.1 Usually whether a pitch or mooring constitutes a dwelling will depend upon it being a separate hereditament under the General Rate Act 1967 definition. Therefore, even if the value of the caravan or boat is not included, providing the pitch or mooring is occupied by a caravan or boat which is the sole or main residence of an individual it will fall to be separately banded and entered in the valuation list.
7.2 There may however be cases where the pitch or mooring will form part of a larger hereditament. An example of this may be where a caravan is situated within the curtilage of a house and used for domestic storage or overspill accommodation for family and friends. The pitch will still be domestic property. This is because, whilst the caravan is not a sole or main residence of an individual, it is an appurtenance to other living accommodation.
7.3 Article 3 of the Council Tax (Chargeable Dwellings) Order 1992 S1 1992/549 states
"Where a single property contains more than one self contained unit, … the property shall be treated as comprising as many dwellings as there are such units, and each such unit shall be treated as a dwelling".
Article 2 defines a "self contained unit" to mean
"(a) a building or part of a building
(b) a caravan or
(c) a boat
which has been constructed or adapted for use as separate living accommodation".
Article 2 has been changed with effect from 1st April 1997, by the Council Tax (Chargeable Dwellings, Exempt Dwellings and Discount Disregards) Amendment Order 1997 SI 1997/656, so that "self contained unit" now means
"a building or part of a building which has been constructed or adapted for use as separate living accommodation".
There is no mention of caravans or boats.
7.4 If it is necessary to consider circumstances prior to 1 April 1997, eg when dealing with a proposal made before that date to aggregate or disaggregate, reference should be made to CTM:PN5.
8.1 If there are a number of adjacent moorings to which the circumstances in 6.1 (b) apply they will all form part of one hereditament and will be a single "dwelling" subject to one Council Tax band unless, it is clear that the boat owner is in exclusive possession of the mooring, when a separate banding will apply.
8.2 If there are a number of adjacent moorings, some of which are used by boats which are sole or main residences and some of which are used by pleasure boats, but no boat owners have exclusive possession of any particular mooring, there would appear to be a composite hereditament occupied by the owner of the moorings.
9.1 Where a caravan is brought on site specifically to provide temporary accommodation as a sole residence whilst a new building project is in progress, the pitch should usually be entered as a new dwelling. The caravan will be the sole or main residence during the construction period, and therefore its pitch liable to banding as domestic. The pitch (and caravan if sufficiently permanent) should be identified and valued. The address identification should include the words “Pitch for caravan at……”
9.2 The building project will not be considered part of the hereditament providing it is incapable of beneficial occupation and effectively ‘in builders hands’. If the project was originally a dwelling and if it is no longer capable of being considered a dwelling because of the extent of works, it should be taken out of the list, and the pitch (and caravan) entered as a new separate dwelling on the basis that it is a sole residence. The caravan pitch hereditament will exclude that part of the site sterilised by building activity.
9.3 On completion of the project, the new hereditament will be different, and the pitch should be taken out of the list because it has ceased to exist as a sole or main residence, and the newly completed dwelling banded.
9.4 A ‘material increase’ necessitates ‘…a building engineering or other operation carried out in relation to the dwelling’ (LGFA S24(10). It is not considered that new buildings being constructed to make a new and separate permanent dwellings fall into the definition of material increase as envisaged by the legislation. They are not carried out in relation to the dwelling. They are unconnected with the pitch for the caravan, which has different basis in law, and only exists as a dwelling whilst it is temporarily a sole or main residence. By following the above procedure, it cannot be claimed that the new house is a material increase to the caravan pitch. It should be understood that a pitch with any caravan that might be included, ceases to be a dwelling in law, the moment it is no longer used as a sole or main residence.
10.1 The valuation of a pitch or mooring is to be made in accordance with regulation 6 (or 7 if composite) of The Council Tax (Situation and Valuation of Dwellings) Regulations 1992. The valuation will reflect the (deemed) freehold interest with vacant possession and will also include the capital value attributable to the caravan or houseboat if the two together would have formed a single hereditament for the purposes of s.115 of the General Rate Act 1967 (see 5 above).