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Business rates

Empty or unoccupied properties

Business rates will not be payable in the first three months that a property is empty.  This is extended to six months in the case of certain industrial properties.  After this period, rates are payable in full regardless of whether there is a change of owner or tenant. In most cases the unoccupied property rate is zero for properties owned by charities and community amateur sports clubs. In addition, there are a number of exemptions from the unoccupied property rate.

If the unoccupied property rate for the financial year has been reduced by order, it will be shown on the front of this bill.

Who is liable to pay the empty charge?

Liability to pay the empty charge falls upon the person entitled to possession of the whole hereditament – the 'owner'.

Once the property becomes occupied again (either in whole or part) then the occupier will become liable to a full charge at 100%.

The owner should note however that if the period of occupation is less than six weeks, then in deciding whether the property has been continuously unoccupied, it is deemed to have been unoccupied for that period. This means in effect that no further three months 'free period' is allowable if the property is occupied for less than six weeks either during the 'free period' or during a period subject to an empty rate charge.

Empty New Builds

The government is introducing a new temporary measure for unoccupied new builds from October 2013.

Unoccupied new builds will be exempt from unoccupied property rates for up to 18 months (up to state aid limits) where the property comes on to the Rating list between 1 October 2013 and 30 September 2016.

The 18 month period includes the initial 3 or 6 month exemption and so properties may, if unoccupied, be exempt from non-domestic rates for up to an extra 15 or 12 months.

Exemptions – property

If your property is or becomes occupied, please notify the revenues and benefits service straight away of your change in circumstances.

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 property has been empty for less than three months, or six months in the case of industrial property
  • The property has a rateable value less than £2,900
  • The owner is prohibited by law from occupation, 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 that Act (such as a listed or protected  building)
  • The property is included in the Schedule of Monuments compiled under Section I of the Ancient Monuments and Archaeological Areas Act 1979.     

Exemptions – owners

Certain owners are also exempt from unoccupied property 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 hereditament in his capacity as trustee under a deed of arrangement to which the 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 that Act
  • The owner is entitled to possession of the hereditament in his capacity as liquidator by virtue of an order made under section 112 or section 145 of the Insolvency Act 1986
  • From 1 April 2008, the owner is a company in administration within the meaning of paragraph 1 of Schedule B1 to the Insolvency Act 1986 or is subject to an administration order made under the former administration provisions within the meaning of article 3 of the Enterprise Act 2002 (Commencement No. 4 and Transitional Provisions and Savings) Order 2003
  • From 1 April 2008, empty property which is held by a charity or community amateur sports club, where it appears likely that when next in use, it will be used for charitable purposes or for the purposes of the club.         

Exemptions – industrial property

Prior to 1 April 2008, industrial property received a permanent exemption from empty property rates, if it was a 'qualifying' industrial hereditament.  After 1 April 2008 industrial property is exempt from empty property rates for a continuous period not exceeding six months, after which 100% of the occupied business rate is payable.  A qualifying industrial hereditament 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 adapted for use for one or more of the following purposes, or one or more such purposes and one or more purposes 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. 

Partly occupied property

Where a property is only partly occupied for a short time only, the council has the discretion to request that the valuation officer apportions the properties rateable value, between its occupied parts.

From 1 April 2008, the empty part of the property will receive a complete exemption from rates for the first three months it is empty, or for the first six months in the case of industrial property, after which 100% rates will become payable.

If the property qualifies for an exemption from rates when empty, the apportioned rateable values will continue to apply.

If you believe this exemption is applicable to your business, please fill in our Section 44a Part Occupied Property Relief Claim Form

If you have any queries regarding Empty Property Relief, please contact us by email or phone 01925 443210.