To incentivise the use of empty properties, the Government introduced several changes to empty rates relief which became effective in April of this year.

Prior to 1 April 2008, all empty properties benefitted from reduced business rates of up to 50% of the basic occupied business rate (calculated on the basis of the rateable value of the property as assessed by the Valuation Office Agency), or a total exemption from business rates.

Since 1 April 2008 where a property is unoccupied for more than 3 months (or more than 6 months if it is industrial property) it will not receive any relief from rates and from then the property will be subject to the basic occupied business rate unless it qualifies for an exemption under the Rating (Empty Properties) Act 2007 or the NNDR (Unoccupied Property) Regulations.

Exempt properties now include:
•Properties with a rateable value of less than £2,000
•Empty listed buildings
•Properties owned by companies in administration
•Empty properties which are linked to charities (i.e. where a charity has an interest in the property and the charity is to be the next to use the property)
•Empty properties that are held by a community amateur sports club and that sports club is to be the next to use that property will be exempt from business rates.

Where only part of a property is empty, that part will benefit from 3 months (or 6 months if it is industrial) rates free and will then be subject to the occupied business rate which applies to the rest of the property, unless the empty part qualifies for an exemption.

Where an empty property is in disrepair and it is not economically viable to repair it, the valuation officer may conclude that it should be taken out of the rating list. However, to avoid deliberate damage to properties, the Government is contemplating the imposition of punitive measures!

If this article has been of interest to you or if you would like to discuss any of the points raised in this article in more detail, please contact our Head of Property, STEPHEN SOLOMONS (email: stephen.solomons@pswlaw.co.uk)