Briefings
Business Rates Revaluation Alert
The rateable value of all commercial property in England and Wales is reassessed every five years, and the next revaluation is due to be implemented on 1 April 2010.
Whilst this is nearly two years away, you need to start gathering information now as the new rateable values will be based on rental values as at 1 April 2008.
Leases invariably record headline rents but, for rateable value purposes, the revaluation exercise is intended to be based on the net effective rent after taking into account all incentives offered to the incoming tenant.
Investor landlords might want to keep such incentives confidential from the letting market, but should keep a record of all those that are offered to tenants in order to provide evidence to facilitate any necessary appeal against the proposed new rateable value in two years' time.
The date of assessment also coincides exactly with the reduction of empty rates relief whose openly stated aim is to encourage landlords to relet empty property quickly, and consequently at a competitive (i.e. lower) rent. The Valuation Office is assuring the industry that the effect of the removal of empty rates relief will be reflected in the new rateable values, but interested parties should still keep an eye on what is happening in the market now, again to assist in any necessary appeal.