Properties that are assessed for non-domestic rates by the Valuation Office Agency may be exempt from payment where they are deemed unoccupied for commercial purposes in accordance with Section 45 Local Government Finance Act 1988.
Liability for unoccupied non-domestic property falls on the party entitled to possession. Where a lease or similar fixed term agreement exists, then that party shall be liable during the period of the respective agreement. Where no agreement exists, liability falls on the freeholder.
For the first three months (six months for property classified as industrial) a non-domestic property is vacant, an exemption is applicable. Upon cessation of the exempt period a full non-domestic rates charge based on the standard non-domestic rate multiplier is payable. The start date of the exemption commences on the date the property first becomes vacant and does not reset should the liable party change. Occupation periods of less than 42 days are disregarded when determining the start date of any future exemption entitlement.
Exclusions to time limited exemptions
Certain categories of property that are vacant are excluded from the above rules and may receive an exemption on a continuous basis whilst they remain unoccupied. These are as follows:
- Listed buildings
- Where the rateable value of the property is less than £2,900
- Where the liable party is a personal representative of a deceased person
- Where the liable party is subject to a bankruptcy order, liquidation or administration
- Properties that are prohibited by law from being occupied
- Property owned by charities or CASCs where its next use is in accordance with the objectives of the respective organisation
Where a premises is categorised as unoccupied under Section 45 Local Government Finance Act 1988, reliefs applicable in accordance with Section 43 Local Government Finance Act 1988 (occupied property) cannot be considered.