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Unoccupied properties

From the 1 April 2008 there have been significant changes to the regulations governing the treatment of unoccupied business rate properties. Shown below are the regulations that currently apply and those that applied prior to the 1 April 2008.

Where charges are raised, liability for the charge is that of the person entitled to possession; this is usually the owner or leaseholder.

A property will normally be treated as empty if it is not being used and has been cleared of contents. Property may be treated as empty if it contains plant, machinery or equipment that was either used in the property when last in use, or is intended to be used when next occupied.

If stock or goods were left in the property, then it would normally be treated as being occupied.

From 1 April 2008

• Property becoming empty will benefit from a rate free period of 3 months for a commercial property (Shops and Offices etc.) and 6 months for industrial property (Factories and Warehouses etc.)
• Following the expiry of the 3 or 6 month free period the property will either be exempt from the charge or liable, the permanent exemptions for industrial and storage no longer apply.
• If the 3 or 6 month rate free period has already expired by the 1 April 2008, then charges will be raised on the empty property from the 1 April 2008.
• If there is a liability, a charge will be raised, equivalent to 100% of the normal occupied charge.
• If a property becomes occupied and then empty again within 6 weeks, no further rate free period will be allowed.
• Listed buildings remain exempt.
• The exemption threshold of £2,200 (2005 Rating List) remains in place, therefore, any properties with a Rateable Value under this value will be exempt.
• A new zero business rate will apply to empty premises owned by charities or community amateur sports clubs (CASC’s).
• Exemptions based upon the ratepayers circumstances continue to apply, where the person entitled to possession is made bankrupt, a company in liquidation, a deceased estate or if the ratepayer was unable to occupy as a result of action taken by the local authority or Courts.

Prior to 1 April 2008

• Property becoming empty would benefit from a rate free period of 3 months.
• Following the expiry of the 3 month free period the property would either be exempt from the charge or liable.
• If liable, a charge would be raised, equivalent to 50% of the normal occupied charge.
• This charge would continue until the property became occupied or until a change to the assessment removed the charge, such as being taken out of rating.
• If a property became occupied and then empty again within 6 weeks, no further rate free period would be allowed.
• If exempt from the charge, no charges would be raised.
• Exemptions were either based upon the property or the circumstances of the ratepayer.
• The majority of exemptions were based upon the property usage, these being either industrial or used for storage.
• A smaller number of properties were also exempt because they had been designated as Listed Buildings.
• Exemptions based upon the ratepayers circumstances applied where the person entitled to possession was made bankrupt, a company in liquidation, a deceased estate or if the ratepayer was unable to occupy as a result of action taken by the local authority or Courts.
• There is a minimum Rateable Value threshold for raising the empty rate charge and that is £2,200 (2005 Rating List), any empty property with a rateable value below this level will not face rate charges.

The above information provides a basic guide to unoccupied rate charges. For clarification on how a specific property would be treated when empty, please contact the Business Rate team on 0161-793-3390 or email business.rates@salford.gov.uk.

This page was last updated on 31 October 2008

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