Empty Property Rates Relief
All non domestic premises are subject to Uniform Business Rates.
Prior to 1st April 2008, any vacant office or retail property was exempt from uniform business rates for a maximum period of 3 months and if the premises continued to remain vacant business rates were then charged at 50%. Industrial property has not enjoyed the same relief and where such property is vacant, empty property rate relief was not available.
The Government introduced changes to the application of empty rate relief which were implemented on 1st April 2008.
Offices and retail property will now be subject to full business rates if they remain vacant after the exemption period of 3 months.
With regard to industrial properties an exemption period of 6 months is now available and thereafter if the property continues to be vacant, business rates will then be charged at the full rate.
Reforms to empty rate relief were introduced to increase the supply of commercial property and with a further aim to reduce rent levels which the Government believe hinders the competitiveness of the UK. It was noted in a Government consultation that UK office rents “are routinely among the highest in the world” and it was even claimed rent was “some 30% higher than our EU competitors, with London, Manchester and Leeds all ranked above Manhattan in a list of the worlds costliest office locations”.
The Government hopes the reforms will provide an incentive for owners to re-use, re-let or re-develop their empty properties. With the changes in empty rate relief, it would be in the landlords or land owners interest to ensure the property does not remain vacant beyond the exemption period which in turn would lead to more availability of commercial premises thus driving down the cost to businesses.
For further information regarding any Commercial Property matter contact Rebecca Tsang LL.B on 01405 765661.