Business Rate Exemptions

The Non-Domestic Rating (Unoccupied Property) Regulations 1989 prescribe the circumstances in which owners will be exempt from liability for rates on unoccupied non-domestic property.

Unoccupied Properties

In most circumstances there is no liability where the whole hereditament has been unoccupied for a continuous period of three months. This means that the rate is not payable for the first three months after either the date an occupied property becomes empty or the date of completion, providing it stays empty.

A property must be continuously occupied for six weeks to be able to qualify for this exemption

Qualifying industrial hereditaments

In the case of Industrial properties, there is no liability where the whole hereditament has been unoccupied for a continuous period of six months. This means that the rate is not payable for the first six months after either the date an occupied property becomes empty or the date of completion, providing it stays empty.

A ‘qualifying industrial hereditament’ is defined as any hereditament other than a retail hereditament in relation to which all buildings comprised in the hereditament are:

• Constructed or adapted for use in the course of a trade or business:
• Constructed or adapted for use for one or more of the following purposes, or one or more such purposes and one or more purposes ancillary thereto:
• the manufacture, repair or adaptation of goods or materials, or the subjection of goods or materials to any process;
• storage (including the storage or handling of goods in the course of their distribution);
• the working or processing of minerals;
• the generation of electricity.

Some properties are exempt from Unoccupied property rates regardless of how long they are empty and below are some examples:

Occupation prohibited by law

An unoccupied hereditament is exempt where its owner is prohibited by law from occupying it or allowing it to be occupied. This situation may arise where a local authority has taken legal action to prevent occupation on the grounds of a risk to health and/or safety. Planning restrictions do not count.

Action to prohibit occupation or acquire

Exemption is provided for where a hereditament is kept vacant by reason of action taken by or on behalf of the Crown or any local or public authority with a view to prohibiting the occupation of the hereditament or to acquiring it. Planning restrictions do not count.

Listed Buildings

A hereditament which is the subject of a building preservation notice, or which is included in a list of buildings of special architectural or historic interest, is exempt. Although only the part of the building subject to the notice is exempt, any later extensions would still be liable.

Minimum Rateable Value

Hereditaments in England with a rateable value of less than £2,200 are exempt.

Personal representatives of deceased persons (Executors)

A hereditament is exempt where the owner is entitled to possession only in his capacity as the personal representative of a deceased person.