The Department of Housing, Local Government and Heritage has published regulations dealing with rates abatement and rates waiver schemes under the Local Government Rates and Other Matters Act 2019 (the "Act"). The Act underpins the new commercial rates regime which was commenced on 1 January 2024. Our summary of the new rules is here.
Local Government Abatement of Rates in Respect of Vacant Properties Regulations 2024 – S.I. No. 348/2024
These regulations prescribe rules concerning schemes for the abatement of rates in respect of vacant properties. Local authorities may specify all or any of the following in respect of an abatement scheme:
- the class or classes of vacant properties to which a scheme applies;
- the liable persons or classes of liable persons to which a scheme applies; and
- the period of time to which a scheme applies.
'Vacant property': Section 9(12) of the Act defines "vacant property" as a property which is unoccupied for the purpose of the execution of additions, alterations (including demolition or redevelopment) or repairs, or because the liable person is bona fide unable to obtain a suitable tenant at a reasonable rent. This is similar to the definition under the old regime.
Approval of abatement scheme: A financial report and a report summarising written submissions from the public consultation process must be considered by a local authority prior to the approval of a scheme. The authority must publish details of the scheme on its website.
Who can apply? Any "liable person" (as defined) can apply to a local authority for an abatement of rates under an abatement scheme. The Act originally required the local authority to determine the application within three months but this provision has since been deleted so there is currently no statutory time limit within which the authority must determine the application.
Matters to be dealt with in regulations: Section 9(3) of the 2019 Act sets out the matters which the Minister can deal with in regulations. These matters include specification of:
- the maximum amount of abatement of rates that may be granted by a local authority; and
- the valuation thresholds below which the above will not apply.
The regulations do not specify either of the above.
Local Government Waiver of Rates Regulations 2024 – S.I. No. 349/2024
These regulations set out the requirements for local authorities to adopt a scheme for the waiver of rates from 2025 onwards. Section 15(1) of the Act provides that a local authority may make a scheme providing for the waiver of rates to support the implementation of the National Spatial Strategy, a development plan or a local area plan within the meaning of the Planning and Development Act 2000 and a local economic and community plan within the meaning of the Local Government Act 2001.
Proposal for a Waiver Scheme: A local authority cannot make a waiver scheme or amend an existing scheme unless it is proposed to the authority by a strategic policy committee* established by the authority before 30 June in any year before the local financial year in which a waiver scheme is be made. Any such proposal for the financial year 2025 must be made before 30 September 2024. A local authority can only have one waiver scheme in operation within each local financial year,
*Strategic policy committees are set up by local authorities under Section 48 of the Local Government Act 2001 in accordance with Ministerial guidelines to advise the authority on matters connected with the formulation, development, monitoring and review of policy relating to the local authority's functions. Membership of such committees comprises both members and non-members of the authority.
Approval of Waiver Scheme: A waiver scheme endorsed by the strategic policy committee must be considered by the local authority (along with a financial report and a report summarising written submissions from the public consultation process) and approved at or prior to the annual budget meeting. A scheme may specify conditions and levels of waiver that vary within the period to which a scheme applies. An authority can provide for an amount of money to fund a waiver scheme or renew the operation of an existing waiver scheme. Details of the scheme must be published on the authority's website.
Matters to be Dealt with in Regulations: Section 15(5) of the 2019 Act sets out the matters which the Minister can deal with in regulations, including specification of the maximum percentage of rates that may be waived by a local authority. These Regulations do not specify any such maximum.
We understand that the Department's delay in publishing guidance on the new commercial rates regime was due to ongoing work on the above regulations. Now that the regulations have been published, it is hoped that the guidance will issue shortly.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.