A landmark Supreme Court judgement could mean that developers are wanting to renovate shops and offices could save thousands of pounds. The recent case of Newbigin vs Monk are giving lawyers a cause to think that local ratepayers and developers could end up paying less for their business rates.
The case in question focused on a disagreement around the rateable value of a property located in the North East of England that was undergoing extensive redevelopment. It was argued by the ratepayer in this case that because all of the services and installations had been stripped out as a part of the refurbishment the building should not be given the value of a useable office block. Therefore, any developers that are looking at renovating shops or offices could be able to save thousands in business rates during the redevelopment. The Valuation Office disagreed and stated that the building should be valued as a property that is capable of being put back in to commercial use unless it is beyond economic repair. The ratepayer says that the rateable value of a property being developed should be £1 whereas the VO says that is should be £102,000. This is a significant difference in views over the rate of pay, and the Supreme Court sided with the ratepayer.
The judgement will be applied on a case by case basis as it has to be considered whether a property is completely incapable of any beneficial occupation. However, the ruling does show support for both ratepayers and developers. This is because it means that the ratepayer could get the rating altered during a redevelopment. In Newbigin vs Monk, it was decided by the supreme court that the starting point for deciding on the building rates should be done objectively and the scheme of works that are being carried out should also be taken into consideration.
Property & Development Magazine
