Changes To The Business Rates Liability For Empty Properties
By Mark Ellis
The Government has decided to reform the way business rates are charged as an incentive to bring empty commercial buildings back into use. From 01 April 2008 the law will change to dramatically reduce the amount of relief given against business rates on empty commercial and industrial buildings.
The Rating (Empty Properties) Act 2007 gives effect to the Government’s proposals to reform relief from business rates in respect of empty property. This reform has been introduced by the Government to encourage owners and occupiers of all commercial property to re-let, re-develop or...
...sell unoccupied property. It is thought that this reform will help increase the supply of premises available to let, which should then make the market more competitive and as a knock on effect drive down rents.
The Situation at Present
At present, most vacant commercial properties receive 100% relief from business rates for the first three months that they are unoccupied, after that a relief of 50% applies. Industrial and warehouse premises receive 100% relief when they become vacant, for as long as they remain vacant. Vacant properties owned by charities and community amateur sports clubs currently receive 90% relief on business rates.
What will the changes mean for your Business Rates liability?
The new legislation effectively removes the 50% relief from business rates currently enjoyed by vacant commercial properties. As a result, empty rate costs for owners and developers of office or shop premises will double, and owners of unoccupied industrial property who have not been required to pay any empty rates, now face a significant rates liability.
After an initial three month exemption period for commercial properties such as shops and offices, and a six month exemption period for some industrial properties such as factories,... continued on page two >