Empty Property Relief for Businesses - Policy Update
Argyll and Bute Council · 8 May 2025
Back to Policy and Resources Committee — 8 May 2025 and its agenda
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 8 MAY 2025 EMPTY PROPERTY RELIEF FOR BUSINESSES – POLICY UPDATE 1.0 EXECUTIVE SUMMARY 1.1 From 1 April 2023, the administration of Empty Property Relief (EPR) in Non- Domestic Rates (NDR) was devolved to Scottish local authorities. Argyll and Bute Council receives £608,000 annually for three years to manage EPR locally. 1.2 While new policy changes in 2024/25 reduced the Council’s EPR expenditure significantly, the number of empty business properties has continued to rise, reaching 332 by February 2025. 1.3 To address challenges and better support economic regeneration, this report recommends two policy amendments: • Introduction of a targeted discretionary extension of up to 12 months of 100% EPR for owners actively renovating empty properties to bring them back into use. • Restriction of EPR eligibility for large businesses with cumulative rateable property values exceeding £1 million. 1.4 These amendments are designed to make best use of devolved EPR funding by encouraging property reuse, supporting local business owners, and ensuring relief is not disproportionately allocated to large corporations.
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 8 MAY 2025 EMPTY PROPERTY RELIEF FOR BUSINESSES – POLICY UPDATE 2.0 INTRODUCTION 2.1 Following devolved powers granted by the Scottish Government from 1 April 2023, Argyll and Bute Council assumed control over the administration of EPR, with a dedicated budget of £608,000 per annum for three years. 2.2 In 2023/24, the Council operated EPR under the legacy Scottish Government rules and incurred £758,000 in costs across 316 properties, resulting in an overspend in the year. 2.3 To improve sustainability, a revised EPR policy was introduced in 2024/25 which reduces relief over time, encouraging reoccupation of properties. 2.4 Despite lowering projected EPR spend to £254,000 in 2024/25 and an anticipated £62,000 in 2025/26, the number of empty properties increased to 332. This report proposes two strategic amendments to enhance the impact of the EPR policy and provide more targeted business support. 3.0 RECOMMENDATIONS 3.1 Policy and Resources Committee is requested to approve the following policy amendments; i) Introduction of a discretionary 100% EPR extension of up to 12 months. Officers will have the discretion to apply an additional one-year (or lesser period) of 100% relief for property owners with genuine, evidenced renovation projects. Eligibility will be based on clear criteria and subject to regular review. ii) Restriction of EPR eligibility for large multinational businesses. A threshold will be introduced where businesses with empty properties exceeding a cumulative rateable value of £1,000,000 are ineligible for EPR. 3.2 Policy and Resources Committee is further requested to approve that both policy amendments be implemented with immediate effect. 4.0 DETAIL Proposed Policy Amendment 1: Enhanced Support for Renovation Projects 4.1 Under current policy, empty properties receive: • 50% relief for 3 months,
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• 10% for 9 months, • 0% thereafter. 4.2 The proposed amendment introduces flexibility for property owners actively working to bring properties back into use. Specifically, owners can apply for up to 12 months of 100% relief at any time after the property becomes vacant, provided: • Planning and building consents are secured; • A detailed renovation schedule is submitted; • Photographic evidence confirms works have commenced; • The Council’s Empty Business Property Officer is granted access for inspections. 4.3 Applications can be made at any time, whether during the initial relief period or once the property has already moved into full liability and no relief applies. If approved, the enhanced relief is awarded for a maximum of 12 months. There are no further extensions. 4.4 Relief may be awarded on a phased basis (e.g., 3, 6, or 9 months), with officers conducting regular 3-month reviews to confirm progress. Should progress stall, officers retain the discretion to withdraw relief. 4.5 This approach ensures that support is targeted at owners making active, genuine efforts, prevents misuse of relief, and maintains a clear incentive to complete renovation works promptly. Example of Proposed Policy Amendment 1 4.6 A former hotel in Argyll and Bute, vacant since 2010 and with listed building status, has secured full planning and building consents. Under the current scheme, the owner faces NDR charges of £6,800 in 2024/25 and £8,500 in 2025/26. 4.7 With the proposed amendment, the owner could apply for enhanced relief once works commence (for example, from 1 June 2025). If approved, they would receive 100% relief for up to 12 months, enabling circa £8,500 of funding to be redirected to completing renovations, bringing a key community asset back into use. 4.8 If the works are not completed by the end of the enhanced relief period (for example, by 31 May 2026), the relief will cease, and full Non-Domestic Rates (NDR) liability will apply. This approach provides the property owner with a clear and fixed timeline for completion, offering both an incentive to finalise works within the agreed period and the reassurance of avoiding NDR charges during the costly renovation phase.
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4.9 It also creates a clear framework for the Empty Property Officer to reinforce at each of their scheduled three-monthly inspections, ensuring that owners remain focused on completion milestones throughout the duration of the relief period. Relief Flow Table: Current and Proposed Relief Stage Current Relief Policy Proposed Enhanced Discretionary Relief Policy (For Eligible Renovation Projects) Conditions of Award (Consents secured, works commenced) Not Met Met Date property becomes empty 0-3 months 50% relief Current policy applies (all stages) 100% Empty Property Relief available for a maximum of 12 months (commencing date conditions met) during 24 month period 4–12 months 10% relief 12-24 months 0% relief ongoing Post-24 months Not applicable 0% relief ongoing Note: Enhanced relief is available flexibly, aligned with project readiness rather than fixed time periods. Proposed Policy Amendment 2: Restriction of EPR eligibility for very large businesses. 4.10 A small number of large multinational businesses own-high value business properties in Argyll and Bute. If these become vacant and the owners claim EPR a large portion of available funds could be consumed. 4.11 Under the current policy the large multinational businesses would be eligible for EPR diverting much needed funds away from smaller local businesses. 4.12 The proposed amendment introduces a £1,000,000 cumulative rateable value threshold for EPR eligibility.
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Example of Proposed Policy Amendment 2 4.13 A multinational with properties that have a combined rateable value of £2.5 million operations. If granted EPR as part of the current policy they could receive £286,500 in relief, 48% of the Council’s total EPR fund. Excluding such cases prioritises support for local regeneration. Property Analysis and Trends 4.14 The table below shows the trends in EPR by category since the new policy has been introduced; 4.15 Recent analysis shows an increase in properties receiving both Listed Building and Standard EPR: • Standard category: up by 40 (from 229 to 269); • Listed category: up by 13 (from 25 to 38). 4.16 Notably, properties with a rateable value under £1,700 have declined from 63 to 25, indicating success in discouraging prolonged vacancy in lower-value properties. 4.17 While the overall number of EPR recipients has increased, total value of relief awarded has fallen significantly: • From £758,362 in August 2023 • To £253,747 in March 2025 Aug-23 Mar-25 Difference Aug-23 Mar-25 Difference Listed Building 100% 0% 46 73 27 330,884 72,738 258,146 Insolvency 100% 0% 2 5 3 285,300 95,859 189,441 Rateable Value Less Than £1700 100% 0% 155 90 -65 56,470 6,315 50,155 Standard Empty Property Relief 50% for 3 months 10% thereafter 50% for 3 months 90% thereafter 103 148 45 48,865 69,394 -20,529 Ratepayer Deceased 100% 0% 6 6 0 17,172 3,514 13,658 Ground – On Valuation Roll 100% 0% 4 6 2 15,886 3,290 12,596 Occupation Prohibited By Law 100% 0% 1 2 1 3,785 1,730 2,055 Industrial Property 100% for 6 months 10% thereafter 0% for 6 months 90% thereafter 0 2 2 0 906 -906 TOTAL 317 332 15 758,362 253,747 504,615 Type of Empty Property Relief EPR Relief EPR Charge No of Subjects Total Value of EPR (£)
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4.18 The appointment of the Empty Business Property Officer in December 2024 has supported this progress, enhancing engagement with property owners and setting up a structured Business Grant Scheme. 4.19 Some figures are skewed by a single ratepayer in Campbeltown owning 19 empty storage units, and there has been a rise in Standard EPR recipients, particularly among shops and offices — concerning due to their importance to local economies. These properties are being prioritised within the grant scheme. 5.0 CONCLUSION 5.1 While the current policy has reduced overall expenditure, the number of empty properties has increased. Targeted, evidence-based support is required to encourage reoccupation and regeneration. 5.2 Approval of the proposed amendments will: • Align EPR with economic regeneration goals; • Encourage timely reoccupation of vacant properties; • Protect public funds from disproportionate claims by large businesses. 5.3 Combined with the structured business grant scheme, these changes provide a robust platform for revitalising communities across Argyll and Bute . 6.0 IMPLICATIONS 6.1 Policy - The proposed amendments represent a refinement of the Council’s current EPR policy, providing additional flexibility to support economic regeneration while continuing to encourage the reuse of empty properties. Approval will enable more targeted use of EPR funding aligned with Council priorities. 6.2 Financial - The changes will help manage EPR expenditure within the allocated £608,000 annual budget by: • Reducing potential high-value claims from large multinational property owners. • Allowing freed-up funds to be redirected toward structured business support grants. • Supporting long-term financial sustainability of the EPR scheme. Any minor system adjustment costs are expected to be absorbed within existing budgets. 6.3 Legal - The Council has discretion under devolved powers to apply and amend EPR policy locally. 6.4 HR - There are no additional HR implications. The existing Empty Business Property Officer will continue to deliver and monitor the amended policy within current resources and be supported by the NDR team in doing so.
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6.5 Fairer Scotland Duty: 6.5.1 Equalities - There are no direct equalities impacts. The discretionary relief process will be applied fairly and consistently, with appropriate checks and balances in place. 6.5.2 Socio-economic Duty - The amendments are expected to positively impact socio-economic inequality by: • Supporting local business owners and communities to bring vacant premises back into use. • Prioritising funding to projects that support economic regeneration in fragile town centres. 6.5.3 Islands - The amendments will be applied across Argyll and Bute, including island communities. The discretionary nature of the support allows for local context and barriers to be considered and allows tailored support for island based projects. 6.6 Climate Change - By supporting the reuse and renovation of existing buildings, the policy encourages sustainable development and may help reduce the need for new-build developments. 6.7 Risk - Key risks include: • Misuse of discretionary relief if not effectively monitored. • Potential negative feedback from large multinational businesses no longer eligible for EPR. • Mitigations include clear eligibility criteria, ongoing monitoring by officers, and transparency in decision-making. 6.8 Customer Service - The amendments improve the Council’s responsiveness to property owners who are committed to bringing buildings back into use. Streamlined application processes and officer engagement will support better outcomes for customers. 6.9 The Rights of the Child (UNCRC) - There are no direct implications under the UNCRC. However, returning vacant properties to use may contribute indirectly to stronger local economies and community resilience, benefiting families and children. Kirsty Flanagan, Executive Director with responsibility for Finance Policy Lead Councillor Ross Moreland 27 March 2025 For further details or discussion, please contact; Fergus Walker, Revenues and Benefits Manager, Financial Services. Fergus.walker@argyll-bute.gov.uk Fergus Murray, Head of Development and Economic Growth Fergus.murray@argyll-bute.gov.uk