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.
The liability for empty property rate rests with the "person (or company) entitled to possession". This could be the tenant or leaseholder (if there continues to be a valid tenancy or lease) or the owner of the property.
Please note that the 3 month (or 6 month) free period commences at the point the property becomes substantially empty. A change in ownership, lease or tenancy termination does not start a further rate free period.
To qualify for a new exemption period the property must have been occupied continuously for thirteen weeks prior to it being vacated again.
After the three or six month rate free period expires, empty property is liable for 100% of the basic occupied business rate unless:-
- The rateable value of the property is less than a specified amount. From 1 April 2017 the government has set the value at £2,900 (previously £2,600).
- The owner is prohibited by law from occupying the property or allowing it to be occupied.
- The property is kept vacant because of action taken by or on behalf of the Crown, or any other local or public authority, to prohibit occupation of the premises or acquisition of them.
- The property is included in the schedule of monuments compiled under s.1 to the Ancient Monuments and Archaeological Areas Act 1979.
- The property is the subject of a building preservation notice within the meaning of the Planning (Listed Buildings and Conservation Areas) Act 1990 or is included in a list compiled under section 1 of that Act.
- The owner is entitled to possession only in his capacity as the personal representative of a deceased person.
- One of the following insolvency or debt administration situations exists:
- A bankruptcy order within the meaning of section 381 (2) 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 the Deeds of Arrangement Act 1914 applies.
- The owner is a company 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 property in his capacity as liquidator under s112 or s145 of the Insolvency Act 1986.
- The owner is a company in administration under the Insolvency Act 1986 or is subject to an administration order.
There are also no business rates to pay on an empty property if:
- It is held by a charity and appears likely to be next used for charitable purposes.
- It is held by a community amateur sports club and appears likely to be next used for the purposes of the club.
It is important that you tell us of any change that affects your liability to pay rates.
Partly occupied property
If a property is only partly occupied, the Valuation Office Agency (VOA) may be able to value the occupied and unoccupied parts of the property separately. The unoccupied part would then be eligible for empty property rate relief.
If the VOA is unable to value the parts separately and the property is to remain partly occupied for a short period of time only, you may be eligible to claim section 44a part occupied relief.