The Non-Domestic Rates (Relief for New and Improved Properties) (Scotland) Regulations 2022

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations make provision for reliefs to be granted to the amount payable in non-domestic rates in respect of certain lands and heritages which are newly built, or which have been improved, within the meaning of section 2A of the Local Government (Scotland) Act 1975. The relief relates to the 2022-23 financial year.

Part 2 provides for new property and Part 3 for improvement of existing property.

In Part 2, regulation 3 provides that where a new entry is made in the valuation roll that includes a building, and that entry shows no building, or parts of a building, that has previously been shown in the valuation roll, the lands and heritages are eligible for 100% relief. That relief is available for one year from the date the building is first occupied.

Regulation 3(4) provides that if a building is occupied in stages, which result in separate valuation roll entries being made for parts of the building, the relief will continue to be available for each part. The effect is that the occupation of a separate part will not prevent continued availability of relief for an unoccupied part.

Regulation 4 sets out the relief which is available and provides that it is not available in two situations. One is where the new entry in the valuation roll is the result of a property that was subject to council tax (broadly, a dwellinghouse) becoming subject to non-domestic rates. The other is where the building existed on lands and heritages that were exempt from being entered in the valuation roll, but cease to be exempt, such as a building on agricultural lands and heritages which was exempt from entry in the valuation roll, but is entered in the roll as a result of a change of use. This is subject to a transitional provision in regulation 15 preserving relief under regulation 4 of the Non-Domestic Rates (Relief for New and Improved Properties)(Scotland) Regulations 2019 (“the 2019 Regulations”) where it applied on 31 March 2020 and would ordinarily have come to an end on 1 April 2020, owing to a change in treatment of lands and heritages on which there is a building, but which are included in the valuation roll for the first time at a point when the building is no longer “new” in the sense of having been recently built.

Regulations 5 and 6 make similar provision for situations where an existing entry in the valuation roll is altered, rather than a new entry made. There is, however, an additional requirement that the property was unoccupied on the day before the day on which the alteration to the valuation roll took effect.

Part 3, regulations 9 to 11, makes provision for lands and heritages that do not qualify for new property relief, but where existing property has been improved by refurbishment, expansion or construction. Paragraph (2) of regulation 9 provides that the relief is granted on the extent by which the works result in the rateable value increasing, ignoring any intermediate reduction in the rateable value (for example as a result of partial demolition of a building to be expanded).

Regulation 10(4) sets out the amount of non-domestic rates payable for those lands and heritages which are not subject to transitional relief in terms of the Non-Domestic Rates (Transitional Relief) (Scotland) Regulations 2017 and regulation 10(5) sets the transitional limit for those lands and heritages which are subject to transitional relief. Relief is available for one year (see regulation 9(1)(a)).

Relief under regulations 9 to 11 is not available for properties that qualify for relief under Part 2. Regulations 7 and 8 make provision for relief where a property that qualifies for new property relief is improved during the period for which relief under Part 2 has been granted.

An application must be made to obtain any relief under these Regulations, other than in cases where there is an ongoing grant of the relief in place under the 2019 Regulations at the time these Regulations come into force, or where an application has been made under the 2019 Regulations but is yet to be determined (see regulation 14). Regulation 12 sets out how an application is to be made.

Regulation 13 revokes provisions which are superseded by these Regulations, but with a saving so that they continue to operate for the financial years for which they were in force prior to the 2022-23 financial year.