Some Relief for Business Rate Payers with this Supreme Court decision

3rd March 2017

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Developers should now apply to have business rates reduced where they are carrying out redevelopment or major refurbishment works to a commercial building.

On 1 March 2017, the Supreme Court overturned the previous judgment of the Court of Appeal in Newbigin (Valuation Officer) v SJ and J Monk that an office building that was undergoing development was considered capable of occupation and therefore liable for full business rates.

The Supreme Court was asked to decide whether the building should be rated on the basis of its physical condition on 6 January 2012 or whether, as found by the Court of Appeal, the Local Government Finance Act 1988 required the valuation officer to assume that the property was in reasonable repair in its previous state as “offices and premises” on that date.

The Supreme Court unanimously agreed that the building should be rated on the basis of its physical condition on the relevant date. The court ruled that the property should have been valued at the nominal sum of £1 RV, which resulted in a significant reduction in the rates bill during the redevelopment of the building.

This is great news for investors and developers who will now save significant costs on development projects.

To read the complete judgment please visit the Supreme Court website here: Newbigin (Valuation Officer) (Respondent) v S J & J Monk (a firm) (Appellant).

Further information & Legal Advice

If you would like to discuss the points raised in this article in more detail or if you have any queries, please contact a member of our Real Estate Team.

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