Unoccupied Property Rating

The Government has reformed empty property relief in order to provide a strong incentive to bring empty properties back into use. This will help to increase the supply of premises to let, and so reduce business rents and improve the competitiveness of the UK, as well as bringing forward brownfield sites for re-development and so reduce the need for new development on environmentally valuable Greenfield land. The reforms to empty property relief have consequential impacts for the rates liability of partly occupied properties that have been apportioned.

What will this mean for your rates liability?

As of 1^st April 2008 properties that have been empty for more than three months, or in the case of industrial property, for more than six months, will no longer receive relief from rates. When the initial three or six month rate free period expires, empty property will be liable for 100% of the basic occupied business rates.  

However from 1^st April 2008 the rates liability of empty property that is held by a charity and appears likely to be next used for charitable purposes or that is held by a community amateur sports club and appears likely to be next used for the purposes of the club, will be reduced from 10% of the basic occupied rate to zero. This is the new zero rate provided by the Rating (Empty Properties) Act 2007.

Can I take my property out of the rating list altogether?

If your property is not capable of beneficial occupation, because it is in poor condition and cannot be economically repaired, your local valuation officer may judge that it should be taken out of the rating list altogether. Please be aware that if the state of your property is damaged for the purposes of avoiding rates, under new anti-avoidance legislation introduced by the Government, the valuation officer will be required to disregard the change in the property’s state when assessing its rateable value, e.g. if the roof is removed from an empty property for the purposes of avoiding rates, it may be valued as if the roof had not been removed.

How will my rates liability be affected if my property is only partly occupied?

If a property is only partly occupied, the billing authority still has the discretion to request that the valuation officer apportions the property’s rateable value between its occupied and unoccupied parts. From 1^st April 2008, as a consequence of the reforms to empty property relief, the empty part will receive a complete exemption for the first three it is empty or six months (if it is an industrial property). After the initial rate-free period expires, in most cases the apportionment will cease to have effect and the occupied business rates will apply to the whole property. This will ensure that occupiers can benefit from any occupied business rate reliefs to which they are eligible, such as small business rate relief, on the whole of the property, not just the occupied part. However, if the property would qualify for the new zero rate or for an exemption from rates when empty, the apportionment will continue to have effect and the owner will not be liable for rates on the empty part.

Can I appeal against the change in my rates liability?

The changes in rates liability arising from the reforms to empty property relief are not grounds for appeal. The reforms to empty property relief does not affect your right to appeal against your rateable value if you disagree with it, you can still make a proposal against it to your local valuation office.

Should you have any questions, please do not hesitate to contact the office on telephone number 01252 774440.