1) Since 2008, full empty property rates are paid for vacant premises after a short grace period, which is 6 months for warehouses/factories and 3 months for other properties. 2) There are some exceptions where empty property rates do not apply, such as listed buildings, properties undergoing administration/liquidation, or those made vacant due to government action. 3) If none of the exceptions apply, property owners can either seek to delete or reduce the rateable value assessment, or take action to reduce the rates bill by appealing based on circumstances at the appeal date or rental values in 2008.

1. How to reduce your exposure to
Empty Property Rates?
Jerry Schurder FRICS FIRRV
Head of Rating
Gerald Eve LLP
October 2013

2. Since April 2008
• full rates paid for vacant premises after short rates free period
• 6 months for warehouses and factories
• 3 months for other properties
Empty Property Rates –
avoidance and mitigation

3. No empty rates for
• listed buildings
• administration and liquidation
• RVs below £2,600 (£18,000 for 2010/11)
• land
• vacant due to ‘action taken by the Crown, local authority or a
public authority with a view to prohibiting occupation or
acquiring it’
• occupation prohibited
Empty Property Rates –
avoidance and mitigation

4. If none of the exceptions apply
• Either – seek to delete or reduce Rateable Value assessment
Empty Property Rates –
avoidance and mitigation
• Or – take action to reduce rates bill

5. Appeal to
Empty Property Rates –
avoidance and mitigation
Can appeal at any time
Value based on – physical circumstances at appeal date
– rental values at 1 April 2008

6. Empty Property Rates –
disrepair / obsolescence

7. Empty Property Rates –
Incapable of beneficial occupation
• Assumption that is
in a state of
reasonable repair
• Unless
uneconomic to
repair
• Economic test as
at 1 April 2008

8. 2 Harewood Place, London W1
• five floors vacant offices
• owner tried to get RV deleted
• after 18 months instructed Gerald Eve
• identified McDonalds extended, cutting
off secondary fire escape
• persuaded Council illegal to occupy
• saved £330,000
Empty Property Rates Mitigation

9. Empty Property Rates Mitigation
Intermittent occupation
• occupy for minimum of 6 weeks
• on vacation obtain fresh 3 or 6
month rates free period
• can repeat the procedure

10. What is occupation for rating purposes?
Four tests of rateable occupation
• must be actual occupation, and
• it must be beneficial, and
• it must be exclusive to the occupier, and
• not too transient
Empty Property Rates Mitigation
Intermittent occupation

11. Makro Properties v Nuneaton & Bedworth BC 2012
• former cash and carry warehouse used for temporary storage
• 140,000 sq ft
• 16 pallets of documents
• 7 weeks from 25 November 2009
• pallets took up 0.2% of the building
Empty Property Rates Mitigation
Intermittent occupation

12. Makro Properties v Nuneaton & Bedworth BC 2012
“ Insofar as that may be relevant I cannot accept the latter submission.
It has been recognised for a considerable amount of time that ratepayers
or potential ratepayers can and do organise their affairs as to avoid paying
rates… It has often been emphasised that the court is not a court of
morals, but of law.
If the outcome of this case is seen as unacceptable then it is for the
legislature to determine whether further reform is needed. ”
Judge Jarman
Empty Property Rates Mitigation
Intermittent occupation

13. Bluetooth broadcasting
“ the fact that the nature of their
undertaking was such that, once
they had identified the optimum
location for their equipment, they
did not need to ‘use’ more than a
minute fraction of the area
encompassed within the
premises did not prevent their
occupation being rateable
occupation ”
Empty Property Rates Mitigation
Intermittent occupation

14. Letting to a charity
• 80% mandatory relief (20% discretionary)
• letting to a charity only works if they occupy or intend to occupy it for
charitable purposes (of that charity or that charity and others)
• if it is occupied, it must be wholly or mainly used for charitable
purposes to qualify for relief
Empty Property Rates –
Avoidance and mitigation

15. Letting to a charity for bluetooth marketing
Chester and West Cheshire Council v
Public Safety Charitable Trust 2012
• landlord – Thameside Metropolitan Borough Council
• four storey offices in Chester
• PSCT installed 13 bluetooth transmitters
• Council granted mandatory and discretionary relief
• then received 60 similar applications from PSCT
• June 2011 – Council removed discretionary relief
• August 2011 – Council removed mandatory relief
Empty Property Rates –
Avoidance and mitigation

16. Letting to a charity
Kenya Aid Programme
– v –
Sheffield City Council
Empty Property Rates –
Avoidance and mitigation

17. Letting to a charity
Kenya Aid Programme
– v –
Sheffield City Council
Does ‘wholly or mainly’
relate to use made or
floorspace utilised?
“ Correct to take into
account the extent to
which the premises
were used ”
Empty Property Rates –
Avoidance and mitigation

18. Letting to a charity for bluetooth occupation
“ it is reasonable to infer that Parliament intended that the substantial
mandatory exemption from rates for a charity in occupation of a
building should depend upon the charity actually making extensive
use of the premises for charitable purposes, rather than leaving them
mainly unused.”
Mr Justice Sales
High Court in PSCT case
Empty Property Rates –
Avoidance and mitigation

19. “ Newly built commercial property between
1 October 2013 and 30 September 2016
will be exempt from empty property rates
for the first 18 months up to State Aid
limits and subject to consultation. ”
Autumn Statement – December 2012
Empty Property Rates –
Avoidance and mitigation

20. Empty Property Rates –
Live in guardians

21. Empty Property Rates –
Avoidance and mitigation
No empty property rates
payable in respect of a property
‘whose owner is entitled to
possession only in his capacity
as the personal representative
of a deceased person’
Unoccupied Property
Regulations 2008

22. Contact details
Jerry Schurder FRICS FIRRV
Head of Rating
Gerald Eve LLP
72 Welbeck Street
London
W1G 0AY
jschurder@geraldeve.com
Tel. 020 7333 6324
07836 573750