21 Sep 23 by Jordan Kennedy

Government Consultation on Empty Property Relief Reforms 

At Spring Budget 2023, the government announced a consultation to explore the causes of, and potential solutions to, avoidance, evasion and poor rating behaviour within the current business rates system.   

The first chapter of the consultation seeks views on specific proposals to reform Empty Property Relief. The consultation opened in July 2023 and the government invites responses from all interested parties; particularly ratepayers, agents, local authorities, charities, representative bodies and rating professionals. Responses to the consultation will support and inform the development of any policy changes.  

At present, unoccupied non-domestic properties are typically liable for business rates unless they are listed, the ratable value is below £2,900 or the ratepayer is a charity, trustee of a charity, or a registered community amateur sports club. For those properties which are liable, the government maintains an Empty Property Relief scheme which means occupiers receive relief for three months (or six months for industrial properties) when the property becomes vacant. The property cannot then benefit from a further period of Empty Property Relief until it is occupied again for a minimum six week ‘reset period’ before becoming vacant again.  

There are various proposed reforms to the current system, to make it more difficult for ratepayers to utilise the ‘reset period’. The consultation first considers changes to the length of the reset period, increasing it from six weeks to three or six months, requiring a longer period of occupation before Empty Property Relief can be secured. The government is also seeking views on introducing a limit to the number of times a property can benefit from Empty Property Relief in a given period. Under this approach, a property would only be able to benefit from one rate free period. The government is also considering adding additional conditions to the meaning of occupation to ensure the use of the property must be more than is currently necessary under the normal rules of occupation – for example, it could be required that more than 50% of the property’s floor space is occupied. Finally, the relief may be reformed so that local authorities are given discretionary powers to make the decision on the award of Empty Property Relief.  

There are no proposals within this consultation to increase the rates charged on empty properties, nor on changes to the existing mandatory provision of Charitable Rate Relief for occupied properties.  

This consultation closes at 11am on 28 September 2023. You can have your say by completing the online survey here.