Revision to 'Empty Rates Relief'
From 1 April 2008 the Government will cash-in on empty properties as it forges ahead with the revision to ‘Empty Rate Relief’ for buildings in England and Wales creating new financial challenges for the property industry as the Rating (Empty Properties) Act 2008 takes effect – reports Jones Lang LaSalle.
Jonathan Buckle, associate director of Rating in Jones Land LaSalle’s Birmingham office, commented: “The Government has ignored consultation and lobbying from property firms and industry experts, and instead taken the Treasury’s lead on revising ‘Empty Rate Relief’ on commercial properties. In his last budget as chancellor, Gordon Brown, announced that this will generate approx £1.85b in additional revenue for the Treasury between 2008 and 2010, but unfortunately the potential financial damage and knock-on effect will see commercial property owners taking evasive actions to avoid hefty bills.”
Towns and cities across England and Wales could be left with eye-sore pockets of building sites as developers slow the building process at an early stage while seeking occupiers prior to taking the development forward to completion. The Government has reconsidered implementing anti-avoidance measures which would have caused even further stress to the industry should they become legislation.

However, the act still allows the Government to introduce such measures at a later date, should avoidance schemes become prevalent. Presently, all property is entitled to 100% rates relief for the first three months from the date it becomes empty. Thereafter most empty property attracts 50% rates relief until reoccupation and some specified properties, notably industrial properties and listed buildings benefit from 100% rates relief until they become reoccupied.
From 1 April 2008, all property will be entitled to 100% rates relief for the first three months from the date it become empty. Industrial properties will be entitled to 100% rate relief fro the first six months from the date it becomes empty. Thereafter the property will pay full rates. Complete exemption is given to clubs.
Jonathan Buckle concluded: “In light of these changes to the Rating Act 2008 our recommendations to property owners are to take three swift actions. Firstly, as a ratepayer of vacant properties you should consider lodging appeals against the level of assessment of premises. Secondly, appeal against all completion notices within 28 days of service of the notice on new properties, to defer the date that a new vacant property comes into the rating list. And finally, review your strategy on the vacant parts of your property portfolio and consider shorter leases or offering incentives in order to obtain a letting.”