Archive for August, 2012

Rating of empty non-domestic premises

The Non-Domestic Rating (Unoccupied Property) (England) Regulations 2008 removed relief granted to landowners of empty commercial properties in England after three months (six months for industrial properties) from the date when the property became unoccupied.  The purpose was to act as an incentive to bring vacant shops, offices, warehouses and industrial premises back into use.  In the present market, landowners are suffering from the measure.  However, if an unoccupied property becomes occupied for a period of more than six weeks, a further relief period of three or six months arises once the property becomes again empty.

In Makro Properties Limited and anor v Nuneaton and Bedworth Borough Council [2012], a former tenant of an industrial unit, having vacated, agreed with the landowner that it would store a few pallets of documents, which it had to retain, at the unit for a period exceeding six weeks thus entitling the landowner to a further peiod of rating relief after it once again vacated the unit.  The local council refused the relief and claimed empty rates were payable as the pallets occupied only about 0.2% of the unit.  The court reviewed what is meant by rateable occupation and concluded that there was intentional and actual occupation of the unit sufficient to trigger a further period of relief when the occupation ceased.

Julian Sturdy MP has called empty property rates “a regressive and negative form of taxation” and, at the request of the Chancellor, George Osborne, is chairing a working group looking at potential reform.  Amongst the groups which have contacted Mr Sturdy is the BCSC which has written an open letter to him advocating alternative measures including business rates exemption zones in city centres.  We await the working group’s report.

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