Rates liability for empty and partly occupied properties
For the 2010-2011 financial year, no rates will be payable on any empty property with a rateable value of less than £18,000
For empty properties with a rateable value of £18,000 or more, full rates will be payable after an initial three month exemption period (six months in the case of industrial premises). If your property has already been empty for a period of time, full rates may be payable straight away.
For the 2011-2012 financial year full rates will be payable on any empty property with a rateable value of £2,600 and over, unless it qualifies for one of the approved exemptions.
The government reformed empty property relief from April 2008 in order to provide a strong incentive to bring empty property back into use.
The intention was to increase the supply of premises to let, reduce business rents and improve the competitiveness of the UK, as well as bringing forward brown field sites for re-development, reducing 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 does this mean for my rates liability ?
From 01 April 2008 most property that had been empty for more than 3 months ( six months in the case of industrial property) no longer received relief from rates.
After the initial three or six month rate-free period expires, empty properties were liable for 100% of the basic occupied business rate, unless:
the property qualified for the new zero rate provided by the Rating (Empty Properties) Act 2007. From 1 April 2008 onwards, the rates liability of empty property 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.
qualifies for an exemption from rates under the NNDR (Unoccupied Property) Regulations (for example listed buildings or property where occupation is prohibited by law.)
Can I get my property taken out of the Rating List altogether?
If your property is not capable of beneficial occupation – for instance, if it is in poor condition and cannot be economically repaired – your valuation officer may judge that it should be taken out of the rating list altogether.
However, 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, your valuation officer will be required to disregard the change in the property’s state when assessing its rateable value. So for instance, if the roof is removed from an empty property for the purpose of avoiding rates, it may be valued as if the roof had not been removed.
How will my property rates liability be affected if my property is only partly occupied ?
If a property is only partly occupied, the billing authority has discretion to request that the valuation officer apportions the property’s rateable value between its occupied and unoccupied parts.
At present, the empty property rate applies to the empty part of an apportioned building and the full rates are charged on the occupied part.
From 1 April 2008, the empty part will receive an exemption from rates for the first three months (six months if it is an industrial property). Once the initial rate-free period expires, in most cases the apportionment will cease to have effect and the occupied business rate 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 in themselves grounds for appeal. However, if you disagree with the rateable value that appears in the current rating list entry for your property, under the existing arrangements you may challenge it by making a `proposal’ against it to your local valuation office.
Your rights of appeal are not affected by the reforms to empty property relief and you can contact the local valuation office agency (VOA) for further information about the arrangements for making proposals.
A Local Independent Surveyor can advise you if you wish to consider making an appeal or put you in touch with a suitably experienced local professional who can assist in an appeal or valuation to make sure that you are not paying too much.