Empty property rates: what you pay, and when

Empty commercial property still attracts rates. Not immediately, and not in every case, but the default position is that an empty building costs its owner money every month it stays empty. The rules are not complicated, but they are very sensitive to timing, and that is where landlords lose money unnecessarily.

The relief period

When a property becomes empty you get a period of full relief:

• Three months for most property - shops, offices and the like
• Six months for industrial property and warehouses

After that, full rates become payable by whoever is entitled to possession - usually the landlord.

Two points people get wrong. The clock runs from the date the property became empty, not from the date you bought it or took it back. Buy an empty building that has already been vacant for four months and there may be no relief left at all. And the relief attaches to the property, not the owner, so a sale does not reset it.

The 13-week reset

Relief is not a once-per-property allowance. If the property is genuinely reoccupied and then becomes empty again, a fresh relief period can begin.

The catch is how long the occupation has to last. In England the reset period was extended from six weeks to 13 weeks on 1 April 2024. Anything shorter does not restart the clock.

That change killed off a lot of short-term occupation arrangements that used to work, and it is the single most common reason a landlord's expectations about empty rates are now out of date.

The occupation also has to be real. Rateable occupation has a settled meaning - actual, exclusive, of benefit, and not too transient - and arrangements designed to look like occupation without being it are challenged.

Properties that stay exempt

Some empty property is exempt beyond the initial period, including:

• Property with a rateable value below £2,900
• Listed buildings and scheduled ancient monuments
• Property owned by a charity, where the next use is likely to be charitable
• Community amateur sports club premises, on the same basis
• Property where occupation is prohibited by law
• Property held by personal representatives of someone who has died
• Property where the owner is subject to insolvency proceedings

The exemption for property where occupation is prohibited by law is narrower than it sounds and is regularly argued unsuccessfully. It means genuinely prohibited, not merely difficult or uneconomic to occupy.

Refurbishment is a different argument

If a building is being substantially refurbished, the question is not whether it qualifies for relief. It is whether it should be in the rating list at all.

A property that is genuinely incapable of beneficial occupation because of the extent of works being carried out can be removed from the list for the duration, and reinstated on completion. That usually produces a much better outcome than empty rates relief, because there is no time limit on it.

It is also an evidenced argument rather than a form-filling exercise. You need a site record of the actual state of the building, the programme, and information from the contractor - not simply a letter saying that building work is happening. Stripping out carpets and a few partitions will not do it.

What to actually do

If you are holding empty space, three things are worth doing now rather than later:

1. Establish the dates. When did each unit become empty, and how much relief is left? This is the fact everything else depends on.
2. Check the assessment itself. An empty property is still assessed, and an overstated rateable value costs you just as much when it is empty as when it is let.
3. Plan the sequence. Where works are coming, whether they are done before or after a relief period runs out can make a significant difference to the total cost of holding the building.

We do this as a written plan across a property or a portfolio, setting out the liability on each unit, the reliefs available, and the timing decisions that follow. If you are carrying empty rates and not sure whether you should be, send us the bills.