Navigating New Business Rates Reliefs: What London Landlords Must Know About Freeports, Investment Zones, and Film Studio Reliefs

What’s Changing and Why It Matters

In May 2024, the Department for Levelling Up, Housing and Communities (DLUHC) published updated guidance on business rates reliefs related to Freeports, Investment Zones, Improvement Relief, and Film Studio Relief across England. While these reliefs primarily target commercial and industrial properties, their impact on landlords—especially those with mixed-use or commercial premises—is significant.

Freeports and Investment Zones are government initiatives aimed at boosting economic activity within designated areas by offering business rate reliefs and other incentives. Improvement Relief and Film Studio Relief provide targeted reductions in business rates to encourage property improvements and support the creative industries, respectively.

London landlords with properties located within these zones or eligible for these reliefs should understand how the updates affect their liabilities and compliance obligations.

Practical Implications for London Landlords

Identifying Eligible Properties

• Freeports and Investment Zones: If your property is within an officially designated Freeport or Investment Zone, it may qualify for new or expanded business rates relief. This often applies to commercial or mixed-use buildings rather than purely residential ones.
• Improvement Relief: Applies when you have undertaken qualifying improvements to your property increasing its rateable value. The relief temporarily reduces the increased business rates to ease the financial impact.
• Film Studio Relief: Available to properties used as film studios, encouraging creative sector growth.

Landlords of HMOs or mixed-use developments in these areas should verify property addresses against the latest Freeport and Investment Zone maps available on the government website.

Financial Impact and Compliance

• Potential Savings: Business rates can be a substantial cost. Reliefs could reduce your liabilities significantly, improving net yields.
• Eligibility Verification: Reliefs have specific eligibility criteria and application processes. Incorrect claims can lead to penalties or backdated bills.
• Accounting and Reporting: Update your property management and accounting software to track relief eligibility and expiry dates accurately.

Different Landlord Profiles

• Single-Unit Landlords: If your property is commercial or mixed-use within a qualifying zone, check eligibility; residential-only properties are generally excluded.
• HMO Landlords: HMOs with commercial elements (e.g., ground floor shops or studios) may benefit.
• Portfolio Landlords: With multiple properties, a systematic review can uncover relief opportunities across your holdings.
• Accidental Landlords: Those unaware of commercial reliefs should seek advice to avoid missed savings.

Recommended Next Steps

1. Review the Latest Guidance: Visit the DLUHC website and download the May 2024 guidance on business rates reliefs for Freeports, Investment Zones, Improvement Relief, and Film Studio Relief.
2. Map Your Properties: Identify which properties fall within designated Freeports or Investment Zones using official maps.
3. Assess Eligibility: For each property, check if it meets the updated criteria for reliefs, including recent improvements or use as a film studio.
4. Update Your Systems: Ensure your accounting and property management software can track these reliefs and their expiry or review dates.
5. Engage a Property Tax Advisor: A specialist can help interpret the guidance, assess your portfolio, and manage applications or appeals.
6. Communicate with Letting Agents: Ensure agents managing your properties are aware of these reliefs to facilitate compliance and tenant communications if relevant.

How Rentals & Sales Can Support You

Our expert team offers comprehensive portfolio reviews and compliance audits tailored to business rates reliefs and landlord obligations. We can help you:

• Identify properties eligible for new reliefs
• Streamline compliance workflows
• Optimise rental pricing to reflect cost savings
• Liaise with tax advisors for precise financial planning

Contact us today to schedule your portfolio review and ensure you’re maximising available reliefs while maintaining compliance.

Compliance Disclaimer: This article provides general information and should not be considered legal or financial advice. Landlords should consult qualified professionals regarding individual circumstances and obligations.