Last week, the Finance Minister announced that he plans to increase business rates on vacant buildings to 75%, and eventually 100%. It represents a big change in the industry and one which I believe could potentially leave landlords paying for failures in the Northern Ireland planning and infrastructure systems.

While the move to 100% business rates would bring NI into line with England and Wales and is clearly intended to encourage owners to bring vacant buildings back into use, it does not factor in that development or repurposing here in NI has been stifled for many years by an under resourced planning system and underfunded infrastructure across various Council jurisdictions. 

For example, a large number of vacant properties, particularly within Belfast city centre, are currently registered for office use. It is no secret that since the pandemic and the move towards hybrid and remote working, the office market has been challenging and the volume of office stock on the market is surplus to current demand. 

Therefore, if landlords are to redevelop these vacant buildings they will need to apply for change of use, to residential, retail, leisure or food & beverage use for example. Landlords are not leaving these buildings vacant and undeveloped to avoid paying 50% of their rates – they are doing so in large part due to delays in infrastructure development and the planning process, which is not fit for purpose.

With city centre living as a key focus for Belfast City Council’s regeneration strategy and a widely publicised need for more social housing, the move for some vacant commercial properties into residential seems a natural fit. However, our current wastewater infrastructure does not support such a move given the increased demand this would place on the system, and therefore, this is not a practical option for many vacant buildings. 

Until issues are addressed and resolved with infrastructure bodies such as NI Water, which result in repeated delays and rejected planning applications, landlords are left in limbo with vacant buildings and no viable or deliverable options. Rather than motivating those who simply will not act, increasing rates without solving these issues could punish those who are trying to act responsibly but are being failed by the systems.

We are concerned that many landlords could be left paying full rates on buildings that currently they cannot viably redevelop. They could then seek to sell the assets, often realising a negative impact on the capital values of affected properties. The new owners may themselves have no desire or indeed ability to reactivate these properties but simply want to avail of a discounted opportunity which could be banked until such times as it is viable to develop or sell on.

Although we are not in principle against the proposal to bring NI in line with England and Wales, this is not a viable solution when there are systemic issues that need to be addressed to facilitate and encourage the sustainable development that all city stakeholders are seeking.