Empty property rates

Some hope for ratepayers

Owners of empty properties subject to the empty rates tax have received some hope of relief recently, both through the Courts and through parliament. In 2008 relief from the payment of empty rates was withdrawn. Previously owners of industrial properties gained 100% relief whilst owners of other commercial properties received a three month rate holiday and were then subject to a 50% charge. Now industrial properties enjoy a six month rate holiday from when they become vacant and other forms of commercial property enjoy a three month holiday. Each are then subject to a full rate charge.

Through the Courts:

The decision in Makro Properties v Duneaton Borough Council has clarified what constitutes occupation for the purpose of gaining subsequent periods of rate relief. The position is that after an initial rate relief holiday has been taken when a property becomes empty, it must be occupied for a period of at least two months before there is an entitlement to a further rate holiday. The case highlighted the meaning of occupation, confirming that occupation must be beneficial to the ratepayer, actual and not too transient. Even though only a small part of a warehouse building was occupied for the storage of files, it was nevertheless decided that this was sufficient to confirm that the building had been occupied, because the company had a duty to store the files and therefore gained a benefit through the occupation. This should help other ratepayers when it comes to claiming subsequent periods of empty property rate relief.

Through Parliament:

A parliamentary working group, under MP Julian Sturdy, has been set up by David Cameron to investigate empty property rates and to produce proposals for how the empty rates regime could be changed. Proposals are likely to centre around the introduction of targeted relief from empty property rates, including exemptions for new development and rate relief for low rateable value properties. This working group follows proposals recently put to the Welsh Assembly for amendments to empty property rates in Wales.
Claiming rate relief for empty properties is a complex matter which can benefit from expert advice if liabilities are to be minimised.

Peter Conroy
Partner
Trevor Dawson