Changes in Commercial Rates Regime

PUBLISHED: 17th October 2024

A new commercial rates regime came into effect on 1 January 2024.The new rules are introduced by the Local Government Rates and other Matters Act 2019 as amended by the Historic and Archaeological Heritage and Miscellaneous Provisions Act 2023.

Some of the key changes include:

• The legislation introduces a new definition for ‘liable person’ being the person in occupation of the property or if the property is unoccupied, the person entitled to occupy the property on the first day of the financial year (i.e. 1 January).
• There is an obligation on the liable person to notify the local authority within 10 working days of a change to the liable person, and a failure to notify any change in particulars on the rates database relating to the liable person or relevant property is now a criminal offence.
• A new notice requirement has been introduced and, in many instances, there will now be a dual requirement for a vendor and purchaser or landlord and tenant to notify the local authority of the change in liable person.
• A liable person must discharge commercial rates together with any accrued interest prior to completion of a sale. Failure to do so is a criminal offence. It will no longer be possible to discharge outstanding rates from the proceeds of sale.
• A liable person can apply to the local authority for a rates statement at the expected completion date. The rates statement must be provided by the local authority within 10 days of receiving a request in writing from the liable person.
• Any rates and interest due by a liable person will be a charge on the relevant property. Such charge will remain indefinitely until discharged in full; however, such charge will fall away on the sale of the property if the liable person is no longer the owner. The vendor/liable person will remain liable for the unpaid rates and accrued interest.

The new rates regime brings some welcome changes for commercial landlords and tenants as well as new notification obligations.

Conclusion

The requirement to discharge arrears before completing a sale, will likely lead to some vendors engaging in short-term borrowing to discharge commercial rates on selling as it is no longer possible to undertake to discharge commercial rates from the sales proceeds.

Landlords will need to consider the cost implications in taking back possession from tenants where the property will remain vacant. The reduction in the abatement of rates on vacant properties may cause some landlords to defer taking back possession from tenants unless other letting arrangements are in place.

To discuss these further, please contact at Pat Ryan at pryan@lkshields.ie and Stephen Browne at sbrowne@lkshields.ie.