Local government finance circular 5/2023: non-domestic rates relief guidance

Empty property relief

85. From 1 April 2023, Empty Property Relief (EPR) will be devolved to individual local authorities[1]. All elements of EPR will be devolved including rates exemptions for vacant property (e.g. unoccupied listed buildings), enabling councils to administer any local relief for unoccupied properties in a way that is tailored to local needs. The Scottish Government, in line with the independent Barclay Review of non-domestic rates, supports measures that help bring empty property back into economic use.
86. Local authorities have been provided with a financial allocation to give effect to the devolution of this, and it will be for individual local authorities to decide whether to use the powers they have to administer a local relief on empty (unoccupied) properties from 1 April 2023. Powers to award discretionary local reliefs are contained in section 3A of the Local Government (Financial Provisions etc.) (Scotland) Act 1962. More details on this can be found within the ‘Local Reliefs and Reductions’ section.
87. Prior to April 2023, EPR provided a level of rates relief, or an exemption, on unoccupied non-domestic properties. See LG Finance Circular 04/2022 for more detail.
88. Part-occupation[2]: if it appears to the council that part of a property is unoccupied but will remain so for a short time only, it may ask the Assessor to apportion the RV between the occupied and unoccupied parts. In that case, the Assessor must apportion accordingly and the following applies from 1 April 2023: the RV for the whole property is taken for rating purposes to be the apportioned value of the occupied portion only. The Valuation Roll itself is not altered, the apportioned figures being supplied to the council by the Assessor on request.
89. Part-occupation is generally considered when a ratepayer can clearly evidence that part of the property is empty. The start date for relief is the later of the date part-occupation commenced or the start of the financial year in which the council’s request was made to the Assessor. The end date is the earliest of: the end of the part occupation; the end of the financial year in which the council’s request was made to the Assessor; a further apportionment being made; or the property become fully unoccupied. The council may extend the duration into the following financial year.
90. As with statutory reliefs, councils must consider and comply with the Act. A local relief scheme could potentially not be a subsidy if it were regarded as a general measure. EPR was previously regarded as a general measure and unlikely to require to be awarded within MFA limits.
91. A local relief for empty property, following a similar approach to mandatory EPR, may potentially be deemed not to be ‘specific’ and not qualify as a subsidy. Councils should however seek their own legal and subsidy advice.