Empty Rate Legislation

Empty Rate Legislation

Unoccupied Property

From 1st April 2008 The Rating (Empty Property) Act 2007 came into force.  This means that rating charges for empty properties changed and most property that has 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.

Unoccupied Property – Empty Rate Legislation
Properties which are empty and have a rateable value of less than £2,900 are exempt from paying business rates.
Properties which are empty, but have a rateable value of £2,900 and above will be subject to a three month exemption followed by a 100 per cent charge when the exemption ceases.

Industrial property with a rateable value of £2,900 and above will continue to be subject to a six month exemption, followed by a 100 per cent charge.

Properties that meet the following criteria will remain subject to a zero rate when empty:-
• Occupation prohibited by law
• Vacant due to action taken on behalf of the Crown
• Subject to a building preservation notice – i.e. a listed building
• Included in the schedule of monuments compiled under the Ancient Monuments and Archaeological Areas Act 1979
• Owner entitled to possession only in his capacity as the personal representative of a deceased person
• In respect of an owner’s estate, there subsists a bankruptcy order
• Owner entitled to possession as trustee under a deed of arrangement
• Owner is a company which is subject to a winding-up order made under the Insolvency Act 1986 or which is being wound up voluntarily under that Act
• Owner in administration or subject to an administration order
• Owner entitled to possession in his capacity as liquidator

Exemption can also be approved where the ratepayer is a charity or trustee for a charity and it appears that when next in use the property will be wholly or mainly used for charitable purposes.
The same applies where the ratepayer is a Community Amateur Sports Club (CASC) and it appears when next in use the property will be wholly or mainly used for the purposes of that registered club or clubs.

There must be a minimum of six weeks occupation before a new exemption period can commence.

Partly occupied/unoccupied property (Section 44a relief)
Section 44a of the Local Government Finance Act 1988 enables the council the discretion to grant relief on a property that is partly unoccupied, as long as the situation exists for a short time only. The Council will ask the valuation officer to apportion the rateable value between the occupied and unoccupied parts, for the current financial year. This rate relief is intended for properties where there are practical difficulties in occupying or vacating a property in one operation. It is not intended that S44a be used where part of a property is temporarily not used or its use is temporarily reduced i.e. where plant, equipment or machinery remain in it.

No business rates are payable on the unoccupied portion for three months (or six months in the case of industrial hereditaments). After the three month (or six month) exemption has expired, 100 per cent rates will become payable.

A request for relief under the provision of Section 44a should be made in writing as soon as part of the property becomes vacant.  A plan of the building, indicating the occupied and unoccupied areas, should accompany the request.