Navigating Property De-Rating: A Guide for Commercial & Residential Property Owners in London

For property owners in London, managing business rates and council tax costs can be a significant financial burden. One effective way to reduce these expenses is through property de-rating, a process that can temporarily or permanently lower the rateable value of a building. Whether you own a commercial property undergoing redevelopment or a residential property that has become uninhabitable due to major renovations, understanding the de-rating process can help you achieve substantial savings.

At Stripout London, we assist both commercial and residential property owners with strip-out, soft demolition, and enabling works, ensuring properties meet the necessary criteria for de-rating while being prepared for their next phase of development.

This guide will explore what property de-rating is, when it applies, and how you can take advantage of it in both commercial and residential settings.

What is Property De-Rating?

Property de-rating refers to the process of reducing or removing the rateable value of a property, leading to lower or zero business rates (for commercial properties) or council tax (for residential properties). This typically applies when a building is:

• Unoccupied due to redevelopment or major refurbishment

• Structurally altered and temporarily uninhabitable

• Partially occupied, allowing for reduced rates

Once a property is deemed unfit for use, the Valuation Office Agency (VOA) may agree to adjust or remove its rateable value, significantly reducing financial liabilities for the owner.

When Can Property De-Rating Apply?

For Commercial Properties

1. During Strip-Out & Soft Demolition

   • If a commercial property is undergoing significant internal demolition, it may be considered unfit for occupation, qualifying for de-rating.

   • Example: An office building undergoing a complete strip-out before refurbishment may be eligible for rate relief.

2. Major Renovation or Redevelopment

   • Properties undergoing significant structural changes can be de-rated while the work is in progress.

   • Example: A retail space being converted into co-working offices could qualify for a temporary rate reduction.

3. Vacancy & Partial Occupation (Section 44A Relief)

   • If only part of a commercial property is in use, owners may apply for a partial exemption from business rates.

   • Example: A warehouse where only one section remains operational may receive a reduced rateable value.

4. Change of Use & Redevelopment Plans

   • If a commercial property is being repurposed, certain exemptions may apply.

   • Example: A shop being converted into residential apartments may be eligible for rate relief during the transition.

For Residential Properties

1. Uninhabitable Due to Renovation

   • If a residential property is undergoing major structural work (e.g., removal of walls, floors, or utilities), it may qualify for council tax exemption.

   • Example: A house undergoing a full refurbishment with no kitchen or bathroom may be eligible for temporary de-rating.

2. Vacancy Due to Structural Damage

   • If a home has been severely damaged (e.g., by fire or flood) and is uninhabitable, the local council may grant a council tax exemption or reduction.

   • Example: A property undergoing extensive repairs due to subsidence could qualify for de-rating.

3. Listed Buildings & Empty Property Relief

   • Listed properties and long-term empty homes may be eligible for council tax relief if they meet specific criteria.

   • Example: A historic building undergoing conservation work that prevents occupancy may receive tax reductions.

How to Apply for Property De-Rating in London

If you believe your commercial or residential property qualifies for de-rating, follow these steps:

1. Assess the Property’s Condition

   • Conduct a professional survey to determine whether your property is unfit for occupation.

2. Engage with a Strip-Out & Demolition Specialist

   • Working with professionals like Stripout London ensures the strip-out process meets VOA and local council requirements.

3. Submit an Application to the Valuation Office Agency (VOA) or Local Council

   • Provide evidence such as demolition plans, photographs, and structural surveys to request a reassessment.

4. Liaise with Local Authorities

   • Ensure compliance with regulations and check for additional exemptions or relief options.

Why Work with Stripout London?

At Stripout London, we specialize in soft demolition, strip-out works, and enabling projects, helping property owners qualify for de-rating while preparing their buildings for renovation or redevelopment. Our services ensure that properties meet the necessary criteria for tax reductions while minimizing disruption and costs.

✅ Expertise in Commercial & Residential Strip-Outs 

✅ Compliance with VOA & Local Council Guidelines 

✅ Efficient Project Delivery to Minimize Costs & Delays 

✅ Sustainable Waste Management & Recycling Practices

Final Thoughts

Property de-rating can be a valuable strategy for both commercial and residential property owners looking to reduce costs during refurbishments or redevelopment. By understanding eligibility criteria, working with professional demolition contractors, and engaging with the VOA or local councils, you can successfully navigate the process and achieve significant financial savings.

📞 Looking for professional strip-out services to support your de-rating application? Contact Stripout London today!