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News - 01/03/2017

Sense restored as Supreme Court rules in favour of developers

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On Wednesday 1 March 2017, the Supreme Court overturned a previous judgement by the Court of Appeal in which an office building that was undergoing redevelopment was deemed capable of occupation and therefore liable for full business rates. 

The case of Newbigin (Valuation Officer) v SJ & J Monk, which has been at the centre of much controversy for several years, originally displaced the ‘reality provision’ in favour of the assumption that the property was in a state of disrepair meaning that the building’s rateable value would not be reduced while it was incapable of occupation as had previously been the case for all redevelopment or major refurbishment projects.  

However, in today’s judgement the Supreme Court preferred to ask first whether ‘the property that was undergoing alteration was incapable of occupation’ and if the answer is ‘yes’ it should be assessed accordingly which, in this case, was a reduction in the rateable value from £102,000 to £1.  

Welcoming the decision, Paul Easton, National Head of Business Rates at LSH, commented: “Property owners, developers and ratepayers who are or have altered property will be relieved at this decision. There are a significant number of rating appeals that have been held up pending this decision which will now hopefully be resolved.  

“We strongly recommend anyone that has redeveloped, reconstructed or reconfigured a property that was incapable of beneficial occupation during that process to seek professional advice immediately, as it may possible to get the rating assessment altered even after the deadline of 31 March 2017 for the 2010 rating list.”

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