Empty Property Rates & NNDR
Reduce Your NNDR Liability
On Void Commercial Property
Gordon Brown announced in his final budget of 2007, changes to the Non-Domestic Rates system which affects how empty and void commercial and industrial properties are to be treated.
Until April 2008, when a property first becomes empty and unoccupied, a three month void period applied where no rates are payable.
If the property remains empty and unoccupied after the three month period then Empty Property Rates (EPR) becomes due and payable at the rate of 50 per cent of the full occupied charge.
There are some exemptions to empty property rates such as properties which are classed as industrial, or those with a Rateable Value of £2,200 or less.
In these cases, the empty property received 100 per cent relief for an empty rates charge. The exemption from rates continued for as long as the property remained empty and unoccupied.
New Rules
Since April 2008, empty and unoccupied property will receive either a three month void period (vacant offices, retail, leisure and motor trade properties) or a six month void period (vacant industrial property) which will then be followed by 100 per cent rate liability.
The aim is to help prevent properties from remaining empty for long periods of time.
How Does This Affect You?
Property Portfolio Owners and Managers are affected by the new system because the Empty Property Rates exemption no longer apply and 100% of the occupied rates charge will be made on all void and empty commercial properties.
If for example, you manage an industrial estate with a large number of void units, you will have to pay full rates on them for the entire void period.
There are a few options available to help reduce your Empty Property Rates Liability:
1) Lodge a Rates Appeal
It could be possible to appeal against the rateable value of the properties in question, but bear in mind that appeals can go either way. You might end up with a larger liability.
2) Sell The Property or Properties
It’s a fact that many industrial buildings have been void for several years and now lie in a dilapidated state. These properties will soon be liable for full rates and it may be more viable to sell them. We work very closely with a number of industrial property investment companies and pension funds who might be interested in purchasing such properties.
If you want to avoid the Empty Property Rates liability, selling might be a good option. Our buyers will consider industrial units, industrial estates and entire commercial property portfolios throughout the UK.
One no-obligation telephone call to Edgeworth Street could be enough to set the wheels in motion – and there is no commission or fee payable, as we offer a free property finding service to our regular clients.
3) Total Estate Refurbsihment
This might not be as expensive as you might imagine. We have carried out many property refurbishments for our clients throughout the UK. These can range from a quick makeover of void properties to total refurbishment of an estate.
Edgeworth Street can help reduce your Empty Property Rates liability by conducting a free study of the void properties and making suggestions for improving occupation rates.
(See also our specialist dilapidations service).
In some cases, it may be that only a small amount of work is required to a property in order to make it more attractive to a potential tenant. In other cases, refurbishment might be recommended.
We can demonstrate many examples where we have been instrumental in increasing occupation levels in failing industrial estates and commercial properties.
If you have, or manage, a problem property or estate, we will be pleased to provide you with a completely free and unbiased assessment that will help you reduce your property voids.
This impartial advice is available to landlords, portfolio managers and commercial property agents throughout England and Wales.
We have successfully advised industrial property landlords, property pension fund managers, property managers, facilities managers etc and have achieved significant cost savings against alternative schemes.
Our specialist knowledge of industrial and commercial property ensures that you receive the best advice on an individual case by case basis.
If you want to reduce your NNDR liability and increase your occupation levels, please call Robert Street or David Carter on 0121 711 7110, for an impartial, free discussion and, if necessary, a free assessment of your void properties anywhere in England or Wales.