Latest Information
Empty Properties Act
26/08/2008
A new law in April 2008 saw significant changes which have dramatically reduced the amount of relief given against business rates on empty commercial and industrial buildings.
The changes. The Rating (Empty Properties) Act 2007 has effectively removed the 50% relief from business rates that was previously available on vacant commercial properties. The Act has resulted in 100% business rates being payable on most properties after a 3 month exemption period, whilst most warehouses and factories will pay the full rate after a 6 month exemption period.
Why have the changes been made? The reforms are supposed to encourage owners and occupiers of all commercial property to re-let, re-develop or sell unoccupied property. The effect of this could potentially reduce the need for new development and the increase of access to existing premises for businesses was hoped to reduce rents overall.
There is concern that the Government have jeopardised such schemes, developers and landlords may become increasingly cautious of developing or investing in areas where a quick turn around may be risky whilst the Government is presently considering tax incentives for areas of regeneration.
Are all properties affected? There are still some exemptions for certain premises that won't have to pay any business rates at all. This will apply to:
Charities (who automatically receive an 80% reduction and in some cases full exemption, decisions are made case by case).
Community amateur sports clubs (CASC)
Empty buildings with a rateable value below £2,200
Buildings in poor condition which cannot be economically repaired (avoidance of rating charges by undertaking works to the property e.g. removing roofs has been covered by the Act)
Where occupation is prohibited by law.
