Showhouses in housing developments aer not "dwellings", although furnished as such, and are properly entered in the valuation roll until sold to residentiual purchasers, the Lands Valuation Appeal Court has ruled.

Lady Dorrian, the Lord Justice Clerk, Lord Malcolm and Lord Doherty refused an appeal by The Old Course Ltd, against a valuation appeal committee decision to confirm entries in the valuation roll for two apartments in the former Grand Hotel, St Andrews, used as showhouses while the building was being redeveloped as luxury apartments.

The appellants argued that each of the two apartments was a “dwelling” in terms of s 72(2) of the Local Government Finance Act 1992, and that they fell to be excluded from the valuation roll in terms of s 73(1). It was necessary to look at the physical characteristics of the subjects, and use was irrelevant. Unoccupied houses were still houses.

Lord Doherty, delivering the opinion of the court, disagreed. "It is elementary that in characterising subjects for the purposes of valuation for rating it is proper to look not only to their physical circumstances but also to the use to which they are put", he said. "Subjects are valued in their actual state and according to their existing use".

Secion 72(2) did not provide that the only relevant consideration was to be the physical characteristics of the subjects, and the appellants’ suggested construction was not the natural and ordinary reading of the provision. Indeed it would produce absurd results. "Lands and heritages with the physical characteristics of a dwelling house but used only for another purpose or purposes (e.g. as a commercial office or store) would be a 'dwelling house', and therefore a 'dwelling'. In my view it is plain that it was no part of the statutory purpose that such subjects should be excluded from the valuation roll and entered in the valuation list."

Click here to view the opinion of the court.