Empty property rates
The Local Council is required to charge Business rates on empty business property. Some property however may be exempt(see below for details).
Under the Rating(Empty properties) Act 2007 the Government have made changes in how empty business properties will be charged for Business Rates; these changes will apply from the 1st April 2008
The Government has reformed empty property relief on order to provide a strong incentive to bring empty property back into use. This initiative is planned to increase the supply of premises to let; to reduce business rents and improve the competitiveness of the UK; to bring forward brown field sites for re-development and so reduce the need for new development on environmentally valuable greenfield land.
Empty rates are charged 3 months after the date the property first becomes empty. The 3 months free period before a charge is made relates to the property and not the owner/person entitled to possession of the property, therefore if a new owner/person entitled to possession, acquires the property and does not occupy within or after the 3 months period, only the remaining period of the 3 months will apply or they will become automatically liable to the empty rate charge.
The empty rate charge is 50% of the full charge or the charge after transitional relief. As from the 1st April 2008 the empty rate charge will be 100%
Once the property is occupied in whole or in part the charge is then 100%.
Property exempt from Empty rates
Certain property may be exempt from empty rates. Exemption is appropriate in the following circumstances as prescribed by the Non-Domestic Rating(Unoccupied Property) Regulations 1989 (as amended).
- the owner is prohibited by law from either occupying, or allowing the property to be occupied
- the property is kept vacant by reason of action taken by or on behalf of the Crown or any local or public authority with a view to prohibiting the occupation of the property or to acquiring it.
- the property is the subject of a building preservation notice as defined by section 58 of the Town and Country Planning Act 1971 or is included in a list compiled under Section 54 of the Act (i.e. a Listed Building).
- the property is included in the Schedule of Monuments compiled under Section 1 of the Ancient Monuments and Archaeological Areas Act 1979.
No property with a Rateable value below £2200 is subject to an empty rate charge.
Owners exempt from Empty rates
Certain owners are also exempt from empty rates:
- The owner is entitled to possession only in his capacity as the personal representative of a deceased person.
- there subsists in respect of the owner's estate a bankruptcy order within the meaning of Parts VIII to XI of the Insolvency Act 1986.
- the owner is entitled to possession of the property in his capacity as trustee under a deed of arrangement to which Deeds of Arrangement Act 1914 applies.
- the 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 the Act.
- the owner is entitled to possession of the property in his capacity as liquidator by virtue of an order made under section 112 or section 145 of the Insolvency Act 1986. As from the 1st April 2008 this exemption has now been extended to include empty property held by companies in administration.
As from 1st April 2008 if an empty property is held by a Charity and it appears likely that when next occupied it will be for charitable purposes there will be no charge.
Industrial property exempt from Empty rates
A property is also exempt from empty rates if it is a 'qualifying industrial hereditament' which is a property other than a retail hereditament, in relation to which buildings comprised in the hereditament are;
- constructed or adapted for use in the course of a trade or business: and
- constructed or adopted for the use for one or more of the following purposes or one or more such purposes and one ancillary thereto:
- the manufacture, repair or adaptation of goods or materials or the subjection of goods or materials to any process;
- storage (including the storage or handling of goods in the course of their distribution);
- the working or processing of minerals;
- the generation of electricity.
Retail hereditament means any hereditament where any building or part of a building comprised in the hereditament is constructed or adapted for the purpose of the retail provision of:
- goods, or
- services other than storage for distribution services on or from the hereditament.
As from the 1st April 2008 industrial property will no longer be fully exempt. The property will be given an initial period of 6 months where no charge is made. Empty property rate will then be charged at 100% of the occupied rate.
Partly occupied property
If your property is partly occupied and will remain so for a short time, the Local Authority has the power under Section 44a of the Local Government Finance Act 1988 to require the Valuation Officer to apportion the rateable value of the property between the occupied an unoccupied parts. The empty part of the property will benefit from the three/six months exemption rate free period. This can be extended in certain circumstances. Following the exemption period as from the 1 April 2008 the empty property rate is 100% of the occupied business rate and therefore the occupied rate including any occupied business rate reliefs such as small business rate relief will apply to the whole property. This will ensure occupiers can benefit from occupied business rate reliefs on the whole of the property and not just the occupied part.
If you require further information or feel that an exemption is applicable please contact the Business Rates Office on tel 0161 253 5035 or e-mail businessrates@bury.gov.uk.
