Business Rates and Redevelopment
Posted: 05 April 2017
For non-domestic property owners, occupiers and developers the April 2017 Business Rates re-valuation will provide a degree of unwanted uncertainty for many. For property developers or those with plans to redevelop their existing accommodation, the recent case of Newbigin v Monk provides a possible ray-of sunshine.
The UK Supreme Court has overturned a previous Court of Appeal decision, finding that a property undergoing redevelopment is ‘not assumed to be in the same state of repair’ as when it became economic to carry out any repairs (when works began). Rather, a simple question as to whether the property can be occupied at that moment in time should now be asked. Therefore, if in reality the property is not capable of beneficial occupation, then it cannot be assumed to be in an state of repair suiting occupation and should not be liable for full business rates.
In summary, the impact of the ruling will allow a property undergoing redevelopment to have its RV listed at a ‘nominal value’ rather than the full figure, minimising exposure to business rates whilst a property cannot be occupied.