Changes to empty property legislation from 1st April 2008

Background

As part of the Government's commitment to promoting the efficient use of land and property, it is taking action to modernise empty property relief from Non-Domestic rates. This is to provide a positive incentive to bring vacant shops, offices, factories and warehouses back into use.

A 100% business rate charge will apply to most properties that have been empty for three months or more, or six months or more in the case of industrial and warehouse property, with effect from April 2008.

These reforms will encourage owners to re-let, redevelop or sell unused property; improving access to premises and reducing rents for businesses, as well as reducing the need  for development on greenfield land.

What will this mean for my rates liability?

From 1st April 2008, most property that has been empty for more than three months, or in the case of industrial property, for more than six months, no longer receives relief from rates.

Are there any exemptions to this charge?

After the initial three or six month rate free period expires, empty property will be liable for 100% of the basic occupied business rate unless:

1. It is held by a charity and appears likely to be next used for charitable purposes.
2. It is held by a community amateur sports club and appears to be next used for the purpose of the club.
3. The rateable value of the property is less than a certain threshold. These are: 

   Rateable Value Thresholds

   Year	Rateable Value
   2008/09	£2,200 RV
   2009/10	£15,000 RV
   2010/11	£18,000 RV
   2011/12 to 2015	£2,600 RV

   
    
4. The owner is prohibited by law from occupying the property.
5. The owner is prohibited by action taken by the Crown, or any other local or public authority from occupying the premises.
6. The property is included in the schedule of monuments compiled under s.1 to the Ancient Monuments and Archaeological Areas Act 1979.
7. The owner is entitled to possesion only in his capacity as the personal representative of a deceased person.
8. The owner is entitled to possession of the property in his capacity of administrator under the Insolvency Act 1986.

If the following insolvency or debt administration situation exists:

• A bankruptcy order within parts 8 to 11 of the Insolvency Act 1986.
• The owner is a trustee under a deed of arrangement to which the Deeds of Arrangement Act 1914 applies.
• The owner is a company subject to a winding up order made under the Insolvency Act 1986.
• The owner is entitled to possession of the property in his capacity as liquidator under s112 or s145 of the Insolvency Act 1986.

Can I have my property removed from the rating list?

If your property is in poor condition and cannot be economically repaired, the valuation officer may judge that it should be taken out of the rating list altogether.

The valuation officer is an officer of HM Revenue and Customs and can be contacted on 01524 300100 or visit their website www.voa.gov.uk

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.