Rates for 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 unless the unoccupied property rate has been reduced by the government order.

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. 

Exemptions – property

Empty Property Rate Change from 1 April 2011

In 2009-10 the government provided owners of empty properties with help to manage short term pressures in a difficult property market, by exempting all empty properties from payment of business rates, with rateable values up to £15,000.  They up rated the threshold in 2010-11 to £18,000 in line with the general movement of property values at revaluation.

From 1 April 2011, the rateable value threshold below which empty properties are exempt from business rates will revert to its normal level. This was previously £2,200, but will also be up rated in line with the general movement of property values at revaluation, to £2,600.

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 £18,000 (£2,600 effective from 01/04/11)
• 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 1st 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.

Small business rate relief

This relief is only available to ratepayers who apply to their local authority and who occupy either -

(a) one property, or

(b) one main property and other additional properties providing those additional properties each have a rateable value which does not exceed £2 599.

The rateable value of the property mentioned in (a), or the aggregate rateable value of all properties mentioned in (b), must not exceed £17 999 outside London or £25 499 within London, on every day for which relief is being sought.  If the rateable value, or aggregate rateable value, increases above those levels, relief will cease from the day of the increase. 

Ratepayers who satisfy these conditions will have the bill for their single or main property calculated using the lower small business non-domestic rating multiplier rather than the ordinary non-domestic rating multiplier that is used to calculate the liability of other businesses.

In addition, if the single or main property is shown on the rating list with a rateable value which does not exceed £12 000, the ratepayer will receive a percentage reduction in their rates bill for this property of up to a maximum of 50% for a property with a rateable value of not more than £6 000.

If an application for relief is granted, provided the ratepayer's circumstances do not change, the application will not need to be renewed until the next revaluation of non-domestic premises, which happens every five years. Certain changes in circumstances will need to be notified to the local authority by the ratepayer (other changes will be picked up by the local authority). The changes which must be notified are:

(a) the ratepayer taking up occupation of a property they did not occupy at the time of making their application for relief; and

(b) an increase in the rateable value of a property occupied by the ratepayer in an area other than the area of the local authority which granted the relief.

Notification of these changes must be given to the local authority within four weeks of the day after the day the change happened. If this happens, there will be no interruption to the ratepayer's entitlement to the relief. However, failure to notify the authority within this timeframe will mean the ratepayer ceases to be entitled to the relief with effect from the day that the change happened. If they are still eligible, the ratepayer will be entitled to the relief again with effect from the day that they notify the local authority. A notification that the ratepayer has taken up occupation of an additional property must be by way of a fresh application for relief; notice of an increase in rateable value must be given in writing. 

Further one-year increase of Small Business Rate Relief

On 23 March 2011, the Chancellor announced at the Budget that the current temporary increase in Small Business Rate Relief, which started on 1 October 2010 and was due to end on 30 September 2011, will continue for a further year (1 October 2011 to 30 September 2012).

Extension to Small Business Rate Relief

In his autumn statement on 29 November 2011 the Chancellor announced a further 6 month extension to the increase in Small Business Rate Relief.  The increase in relief will now apply from 30 September 2012 to 31 March 2013.

You need take no action. Once the legislation is in place, you will be sent a revised bill. In the meantime, you must continue to pay your current instalments, if you have any. Current collection and enforcement procedures will continue to apply to ratepayers who miss scheduled instalments. 

If you require more information please contact the team on 443210 or email  Revenues&Benefits@warrington.gov.uk