In advance of the forthcoming rating revaluation, draft rateable values have now been published for all commercial properties in England, Scotland and Wales. These values will determine the rates liability from 1 April 2023 and as we predicted last summer, retail properties are going to be the big winners of the revaluation with tangible decreases in liability, while industrial properties are going to see some significant increases.
Good news for retail while industrial set for some significant increases
With the business rates multiplier being frozen in all three countries, the change in rateable value from 1 April 2023 will determine the impact of the revaluation on each individual property. Across England and Wales, the retail sector will experience a 10% reduction in rateable value, albeit in certain locations this will be much greater, with some properties set to benefit from reductions in excess of 50%. At the same time, the industrial sector will experience an average increase of around 27% and for distribution properties this increases to 32%. In London and the South East, many industrial properties will see their rateable values double from 1 April, albeit increases in liability will be capped in year one to 30% thanks to the government’s transitional scheme.
Office sector to also see rises
The office sector is set to see an overall increase in value of 10%, but once again some individual properties will see a much greater rise, whereas others will see a reduction in value. Outside of the three main property sectors, all other properties are set to experience an average increase of 4%, with significant divergence between property types and locations.
Overall mixed picture across the sectors and regions
Based on the Valuation Office Agency’s (VOA) data, we have identified the winners and losers by sector and region. In all regions of the country, the retail sector on average will benefit from the revaluation whereas the office and industrial sectors on average will pay more.
These figures are useful in identifying the impact across sectors and regions as a whole, but it should be remembered that each individual property will have its own unique valuation which may buck the regional and national trends. It is therefore essential that professional advice is taken to ensure the proposed 2023 rateable value is not excessive.
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