Before I get onto the moans about the impending changes to business rates, let’s start with some very good news indeed.
On the 1st March 2017, property developers cheered a landmark ruling by the Supreme Court.
A significant cost to developers undertaking office to residential conversion projects is that normal business rates continue to apply during the conversion works.
The developer SJ & J Monk argued that the rateable value during conversion works should be assessed as being £1 because
the building is not capable of being commercially usable during the redevelopment works.
The developer’s argument was rejected by the Valuation Officer and then by the Court of Appeal in 2015. Then the British Property Federation got involved and the case went to the Supreme Court.
In a unanimous ruling, Lord Hodge decided that commercial buildings undergoing redevelopment should not be valued as if they are still usable.
This is a significant decision for property developers. With business rates in the South East increasing dramatically in April, some residential conversion projects would have become unviable if full business rates were chargeable during the works. (Good reason to be cheerful!)