Changes to empty property rates from 1 April 2008

Tel: 01276 707136
Fax: 01276 707440

Surrey Heath Borough Council
Surrey Heath House
Knoll Road
Camberley
Surrey GU15 3HD

The Government has reviewed the amount of Business Rate relief granted to empty properties with a view to providing a strong incentive to bring vacant property back into use. Their intention is to increase the supply of premises to let, and so reduce business rents, as well as bringing forward brownfield sites for redevelopment reducing the need for building on environmentally valuable greenfield land. To achieve these goals, with effect from 1 April 2008, the Government has decided to:

Raise the empty property rate from 50% to 100% of the basic occupied rate.
Replace the current permanent exemption from rates for owners of empty industrial properties with an exemption for the first six months only following a property becoming vacant. After the six month period has been exceeded, the property will attract an empty charge of 100% of the basic occupied Business Rate.

Some of the other existing permanent exemptions from empty property charges are not being removed. For example, small properties with a Rateable Value of less than £2,200 will continue to be exempt from empty property rates.

How will the changes affect your rate liability?

Most owners of property which has been empty for more than three months as at 1 April 2008 (six months in the case of industrial property) will no longer receive relief from rates. This will mean that owners or leaseholders who have never received a bill or who have been previously billed for the 50% empty property rate will be billed for empty Business Rates at 100% of the basic occupied rate with effect from 1 April 2008. Most owners or leaseholders of property which has been vacant for less than three months (or six months in the case of industrial properties) as at 1 April 2008 or which becomes vacant on or after that date, will receive an initial three- or six month rate-free period commencing from the date the property became empty. After this initial period expires, the vacant property will be subject to a charge of 100% of the basic occupied Business Rate.

Empty property which is held by a charity or Community Amateur Sports Club and which appears likely to be next used for charitable purposes or for the purposes of the club, will not attract empty property charges.

Can you avoid being charged?

If your property is not capable of beneficial occupation - for instance, if it is in poor condition and cannot be economically repaired, the Valuation Officer of the Inland Revenue may judge that the property should be removed from the Rating List, in which case any rate liability will cease. However, please be aware that the Government intends to introduce 'anti avoidance' regulations which, if your property is deliberately made unusable for the purposes of avoiding empty property charges, will allow the property to be treated as if it was still in good repair and you will be charged as such.

How will your rate liability be affected if your property is only partly occupied?

If your property is only partly occupied, the Council has discretion to request that the Valuation Officer of the Inland Revenue apportions the property's Rateable Value between the occupied and unoccupied areas.

Currently, the empty property rate applies to the empty part of an apportioned building and the occupied charges apply to the occupied part. With effect from 1 April 2008, as a consequence of the reforms to empty property relief, the empty part will receive a complete exemption from rates for the first three months it is empty (or, if it is an industrial property, for the first six months). After the initial rate-free period expires, in most cases the apportionment will cease to have effect and the full occupied charge will apply to the whole property. Rate payers may benefit from any occupied rate reliefs to which they are eligible - such as Small Business Rate Relief - on the whole property, not just the occupied part. However, if the property qualifies for a permanent exemption from rates when empty, the apportionment will continue to have effect and the rate payer will not be liable for rates on the empty part.

Can you appeal against the change in your rate liability?

The changes in rates liability resulting from the reforms to empty property relief are not in themselves grounds for appeal. However, if you disagree with the Rateable Value of your property, under the existing arrangements you may challenge it through the Valuation Office Agency. If you own an empty business property and you have never been billed for Business Rates, there has probably been no need to appeal the current Rateable Value. Since most of these properties will attract a charge from 1 April 2008, you may wish to consider making an appeal to the Valuation Office, especially if there has been a change that may affect the value of the property or the property description is incorrect. This will ensure the accuracy of any future bill. You can check the Rateable Value and description of your property on the Valuation Office Agency's website at http://www.voa.gov.uk Opens in a new window. Your local Valuation Office can be contacted at the following address:

District Valuer and Valuation Officer
Guildford Valuation Office
West Block
Westbrook Mills
Borough Road
Godalming
Surrey
GU7 2SG

Telephone: 01483 702900
Facsimile: 01483 702998

E-mail: readinggroup.vo@voa.gsi.gov.uk
Website: www.voa.gov.uk Opens in a new window

Should you have any queries concerning this letter or require further information, please do not hesitate to contact the Non-Domestic Rate Team on 01276 707136.

surreyheath.gov.uk

Changes to empty property rates from 1 April 2008