What is rateable value?

The rateable value of a commercial property is typically based on factors such as the size and type of property, its location, and its rental value in the open market.  The rateable value is reviewed every 3 years and new rates came into force on 1 April 2023.  The 2023 revaluation is the first since 2017, the 2020 revaluation having been postponed due to the Covid-19 pandemic.  The next revaluation will be effective from 1 April 2026.

Business rates are calculated by applying a multiplier (known as the “poundage rate”) to the rateable value of a property. The poundage rate is set by the Scottish Government and can vary from year to year. Property owners or occupiers are then responsible for paying these business rates to their local council.

How has the 2023 Rates Revaluation Affected the North East of Scotland?

Aberdeen City had been hit by big increases in the 2017 valuation which had reflected a strong oil and gas economy at that time.  This has held market rents at a high level compared with other parts of Scotland resulting in high business rating valuations.

This trend changed following 2023’s Revaluation.  In Scotland the average rateable value increased at revaluation in all but two council areas. In Aberdeen City the mean rateable value decreased by 16.35%, and in Renfrewshire by 4.03%.

70% of properties in Aberdeen City have had a decrease in their rateable value.

It was a different story in Aberdeenshire, with only 36%  of properties benefitting from a decrease in rateable value.

Rates Reliefs available for Businesses in the North East

Full details can be obtained by visiting the Business Rates information pages on both Aberdeen City and Aberdeenshire Council’s websites, but various levels of relief are available in relation to particular properties and businesses:

Empty Property Relief – 50% relief available for empty, unfurnished properties for the first three months, and thereafter the relief is reduced to 10%.

New & Improved Property Relief – Relief of up to 100% is available for new build properties for a period of 12 months from the date of first occupation.  An existing building that is improved resulting in an increase in the rateable value may be entitled to relief for 12 months, at 100% for the “increase” resulting from the improvement.

Fresh Start Relief – Relief of 100% for a period of up to 12 months following the reoccupation of properties up to a RV of £100,000 that have been in receipt of Empty Property Relief for a continuous period of at least six months immediately prior to the new occupation. 

Small Business Bonus Scheme – Relief of 100% available for individual premises with RV less than £20,000 (or combined value of all premises less than £35,000), with tapering relief for properties valued between £12,000 to £15,000 (100% to 25%) and £15,000 to £20,000 (25% to 0%).

Specific Organisations – There are rates reliefs available for day nurseries, charitable organisations, sports clubs and organisations that care for disabled persons. 

Union Street, Aberdeen – Empty Shops Grant Scheme

As recently reported by Aberdeen Business News almost 100 properties on Aberdeen’s Union Street have sat empty so far at one point during the financial year 2023/24.

Aberdeen City Council launched an grant incentive scheme in July 2023 with the intention of reviving and regenerating Union Street by:

  • Reducing the number of vacant shops on Union Street through supporting physical works required for internal reconfiguration of vacant shops, so as to allow new businesses and tenants to take up occupation.
  • Support new business entrepreneurs, start-ups and create new employment opportunities through enabling suitable premises on Union Street.

The scheme is available for property owners or prospective tenants who are new business owners, of vacant Union Street premises, and ideally from new or expanding business owners. 

The scheme is not available for large chains (Tesco, Starbucks etc.). Additionally a number of businesses are excluded from the scheme including betting shops, pawn brokers, tanning salons and vape shops. An extensive list can be found online. Existing business owners planning to move from a premises in Aberdeen to Union Street are also excluded from the scheme.

The grant scheme fund totals £500,000 and will be payable until 31 March 2025.

Grant awards will offer up to 50% of project costs for eligible works amounting to £35,000 per premises. Any remaining cost must be met by the applicant.

The grant money can be used for eligible works which include:  room partitioning, installation of permanent WC and kitchen facility, permanent flooring, installation or upgrade of fixtures, internal reconfiguration, and accessibility improvements above and beyond the legal requirements. 

To find out more about how Craig or the Commercial team can help with commercial property matters visit our website or contact Craig at craig.veitch@raeburns.co.uk or on 01224 332400

Call your Local Office

Aberdeen 01224 332400

Aberdeen Property Office 01224 564636

Banchory 01330 822931

Ellon 01358 720777

Inverurie 01467 629300

Stonehaven 01569 762947