Rental Adjustment Flashcards Preview

Local Taxation > Rental Adjustment > Flashcards

Flashcards in Rental Adjustment Deck (5)
Loading flashcards...
1

How would you adjust for a premium

Capitalise rental value for the term, then add on the premium to this capital value, then decapitalise over the period of the term

2

How would you adjust for a rent free period

Capitalise payable period up until review and then discount this sum by the YP for the total term of the lease.

3

How would you adjust for stepped rents

Capitalise each rent up until review then decapitalise this over the period until review

4

Why are premiums and reverse premiums given and how is this relflected in the rent?

A premium is given by the tenant in order to secure occupation of a site. It is typically reflected through a lower passing rent.

Reverse premium is given by the landlord in order to incentivise a tenant to occupy the premises. It is reflected by the landlord increasing the passing rent in order to recoupe the initial sum

5

Why are some rents capitalised to review and others into perpetuity?

Rents may be capitalised into perpetuity where a long rent free period is given or incentive that could skew the capital value