09 March 10
For the year 2010/11, empty commercial properties with rateable values of up to £18,000 will be exempt from business rates.
The Rating (Empty Properties) Act 2007 (REPA 2007) removed business rates relief for most unoccupied properties with effect from 1 April 2008. REPA 2007 was widely criticised by the property industry as an additional strain on businesses in a time of economic difficulty.
In response to this criticism, the 2008 Pre-Budget Report announced that empty properties with rateable values of up to £15,000 would be exempt from business rates for the year 2009/10. The exemption was implemented with effect from 1 April 2009.
This resulted in an estimated 70% of empty commercial properties being exempt from paying business rates.
The 2009 Pre-Budget Review announced that the temporary increase in the threshold for empty property relief will be extended for a further year and the threshold increased to £18,000. This higher threshold reflects the effects of the 2010 business rates revaluation. The Non-Domestic Rating (Unoccupied Property) (England) (Amendment) Regulations 2010 (2010 regulations) have been passed to bring these changes into effect on 1 April 2010.
However, despite pressure from the property industry, the Government continues to assert that, in the long term, it is right to charge rates when properties stand empty. A rating charge encourages owners to re-let and reuse empty property, and owners of empty properties should not expect subsidy.
Consequently the 2010 regulations provide that the threshold will reduce to £2,600 for financial years beginning on and after 1 April 2011.
For more information on Commercial Property, contact Charles Marchant-White on Tel: 01256 320 555.
