The Government overhauled the rating regime on vacant non-domestic properties on 1 April last year.

Prior to 1 April 2008 commercial properties were entitled to 100% relief for the first three months from the date they fell vacant after which time empty office and retail properties were entitled to 50% relief until reoccupied with empty industrial properties enjoying 100% rates relief until reoccupation.

As of 1 April 2008 industrial properties only receive full rates relief for 6 months with office and retail properties receiving just 3 months relief after which time rates are payable in full.

The timing of the legislation could barely have come at a worse time for commercial landlords. With the current economic downturn many landlords are experiencing insolvent tenants leaving them to deal with not only the loss of income stream but picking up the rates liability.

The Government have however recently gone someway to ease pressure on commercial landlords. Prior to 1 April 2009 only properties with a rateable value of below £2,200 were exempt from the rating regime but from 1 April 2009 the Government increased that threshold to £15,000 for the financial year 2009/10 and it is estimated that this will result in up to 70% of empty commercial properties being exempt from business rates.

If you have an empty commercial property which has a rateable value in excess of £15,000 and are interested in ways you might mitigate your rates liability please contact Aaron Cane or a member of the Property team at Wortley Byers on 01277 268398 or acane@wortleybyers.co.uk.

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