So far, the Rating Revaluation has been mostly bad news for commercial property occupiers but a recent Supreme Court decision has provided some light relief (if you’ll pardon the pun).
One of our clients was carrying out repairs to an office building at the time of the Valuation Date. In 2015, works to refurbish the building began with a view to completely stripping out of the majority of floors and removing all services and window frames. All dividing internal walls were also removed and, as a consequence, we argued that the space was not available for beneficial occupation and that the property should be removed from the ratings list or allocated a nominal rateable value.
In the face of objections from the Valuation Office, the dispute went to court but was resolved in favour of our client who has now achieved more than a £1m of savings as a consequence.
This type of exemption only impacts on projects which entail major refurbishment; conversion from one type of commercial use to another; or conversion from commercial to residential use. Suffice to say, these are scenarios which are particularly prevalent across the London property market.
It is clearly a situation which will be replicated by many other property refurbishments, and owners should act now if they want to achieve similar rating relief. Appeals must be lodged by September 30th.