Issue 1 – January 2008

Empty Property Rates Relief

Despite loud protests from everybody within the industry, and a sustained campaign in Property Week, the existing reliefs from rates on empty commercial properties are to be severely restricted from April 2008.

From then, the only available reliefs will be as follows:

• For industrial or warehouse properties, no rates for the first six months of vacancy and full rates thereafter
• For all other commercial properties (including retail), no rates for the first three months of vacancy and full rates thereafter.

Previously, landowners could render their properties uninhabitable to avoid rates liability, but this self-help remedy (or avoidance measure) will no longer be available. The relevant regulations retrospectively provide that any physical changes intentionally made to properties since the announcement of the proposed disapplication of the existing reliefs are to be ignored for the purposes of rates liability.

In future, only charities and Community Amateur Sports Clubs will be able to take advantage of full relief from rates liability in respect of their vacant properties and then only if the next proposed use of them is for their charitable or sporting purposes.

Given that the Government has refused to back down on this issue despite the vehement opposition to it, investors should prepare for its introduction in April 2008.

For further information contact philip.freedman@mishcon.com