Business rates—empty property

The following Local Government practice note provides comprehensive and up to date legal information covering:

  • Business rates—empty property
  • Empty properties: rates
  • What counts as occupation and when is property ‘unoccupied’?
  • Multiple ‘unoccupied’ periods—using short lets to trigger a new exemption
  • Change of ownership and initial period exemptions
  • Insolvent owners
  • Discretion to grant further relief
  • Rates mitigation schemes
  • Negotiations with the Rating Authority

Business rates—empty property

Business rates are generally payable by the relevant ‘owner’ in relation to unoccupied non-domestic property but there are certain exemptions. This Practice Note covers liability for business rates for unoccupied property, including common exemptions (often known as ‘empty rates relief’) with an emphasis on the position in England.

Empty properties: rates

Business rates are generally payable by the relevant ‘owner’ in relation to unoccupied non-domestic property but there are certain exemptions. The ‘owner’ of a hereditament or land for ratings purposes (and therefore the person liable for business rates) is the person entitled to possession of it. See section 45 of the Local Government Finance Act 1988 (LGFA 1988).

LGFA 1988, s 65(1) provides that ‘the owner of a hereditament or land is the person entitled to possession of it’ meaning that the person concerned must be immediately entitled to possession. In Brown v City of London Corpn it was held that the right of a receiver under a debenture to exercise a power to displace the possession of the tenant company of an unoccupied property did not make the receiver the ‘owner’ of the property for the purposes of LGFA 1988, s 65(1) and thereby liable for business rates.

Statutory provisions further governing the position are found for England in the Non-Domestic Rating (Unoccupied Property) Regulations 2008 as amended by SI 2010/408; for Wales in the

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