Local government finance circular 9/2026: Investment Zones Non-Domestic Rates relief and income retention

Glossary

Baseline Income 

Total amount of NDR income payable for all properties within the delineated area, or developments commenced within the delineated area, as at the day before the tax site is designated. This is adjusted each year (rates, property changes, etc).

Updated Baseline

Total amount of NDR income payable for the year, for all baseline properties, updated to take into account changes to the non-domestic rates and other adjustments.

IZ Income 

Total amount of NDR income payable for all properties in the IZ delineated area, less any amount for displacement, arising as a result of the operation of the IZ, derived from NDR paid on new buildings, extension/improvements of existing buildings, and existing buildings which have been rebuilt.

Net IZ Income 

Net NDR income payable (income after reliefs except IZ relief awards or BGA relief awards where the property was also eligible for IZ relief; and including prior year adjustments).

Demolitions

Any property that is demolished, and therefore removed from the valuation roll.

Pre-Demolition Net Income 

Gross NDR income payable for a property when demolished, net of the minimum relief percentage awarded to the property in the three years prior to demolition (provided this was for a period of six months or more),and adjusted for the property rate for the relevant year.

Demolitions re-built (re-builds)

 Properties within the delineated area that are build following demolition (after tax site designation) of an existing baseline property.

Displacement

Adjustment for relocation of properties from outside, to within the IZ delineated area. It is based on an agreed displacement factor which is applied to the IZ NDR income within the IZ area.

Displacement Factor

Percentage as agreed within the IZ agreement, to adjust for relocation of properties from outside the delineated area.

Displacement Adjustment

Amount of income to be subtracted from IZ Revenue for displacement. It equals the displacement factor * New IZ NDR income.

Extensions/Improvements 

Any existing property within the IZ area that have been extended (after tax site designation), where the extension results in additional floor space and an increase in the rateable value of the property.

Relevant Year 

Each period from 1 April in any one year until 31 March in the immediately succeeding year (i.e. the financial year rates are collected for).