Northern Ireland’s commercial property landscape is facing a significant policy shift as Finance Minister John O’Dowd announces plans to increase rates on vacant commercial properties—a move expected to generate an additional £20 million for Stormont and local government. While positioned as a strategy to tackle long-term vacancy and urban blight, the decision will have meaningful financial implications for landlords, investors, and developers.
In this article, we break down what the changes mean, why they are happening, and how commercial property owners can respond strategically.
What Is Changing?
Currently, vacant commercial properties in Northern Ireland are liable for 50% of standard business rates. Under the new proposals:
- Rates liability will rise to 75% before the end of the current Assembly mandate in 2027.
- Vacant properties will pay 100% rates in the following mandate.
- The intention is to create a more progressive, incentive-driven rating system to encourage property activation and redevelopment.
These changes follow a comprehensive review of rates relief measures and form part of a broader strategy to address vacancy levels across Northern Ireland’s towns and city centres.
Why the Change? Tackling Urban Dereliction
In his announcement, Mr O’Dowd highlighted one key priority: reducing the “blight of vacant properties” that has become a visible challenge, particularly in high-profile areas such as Belfast’s stalled Tribeca project.
Long-term empty buildings not only reduce vibrancy and footfall but also hinder regeneration efforts. The government’s view is that the current 50% relief has unintentionally created a barrier to progress, with some properties sitting vacant for extended periods while paying substantially reduced rates.
The proposed shift aims to push landlords to make active decisions—whether that’s refurbishment, redevelopment, leasing, or disposal.
Wider Support Measures for Businesses
Alongside the increase in vacant property rates, the Finance Minister also outlined several support initiatives targeted at small businesses and new enterprises:
- Small Business Rate Relief Enhancements
- The current scheme, unchanged since 2012, supports around 30,000 small businesses.
- Planned enhancements aim to provide greater operational cost relief and level the playing field in an environment of rising costs.
- Business Growth Accelerator
- A new accelerator scheme is set to assist scaling businesses, encouraging investment and development.
- Review of All Rates Relief by 2027/28
- Every form of rates relief will undergo review—indicating further changes may be on the horizon.
Industry bodies including Retail NI and Hospitality Ulster broadly welcomed these proposals, noting, however, that Northern Ireland continues to face the highest business rates in the UK and requires more fundamental system reform.
What Does This Mean for Commercial Property Landlords?
The move to phase out vacant property relief has clear implications:
- Higher Holding Costs
Landlords with long-term empty units will face significantly increased annual liabilities, reducing the financial viability of leaving buildings idle.
- Pressure to Repurpose or Dispose
The rising cost environment may prompt landlords to:
- Bring units to market sooner
- Prioritise refurbishment to secure tenants
- Explore alternative uses (e.g., residential conversion, meanwhile uses, pop-ups)
- Dispose of non-performing assets
- Increased Demand for Redevelopment and Advisory Services
With higher rates acting as a catalyst for action, professional guidance will be essential. Consultancy services around:
- Cost-benefit analysis
- Planning and development feasibility
- Repurposing strategies
- Asset optimisation
will all play a more central role.
Opportunities for Property Owners Who Act Early
While rising rates create challenges, they also create opportunity for proactive investors:
- Increased incentives to revitalise stalled or underused sites
- Potential for grants and support linked to small business relief enhancements
- Greater market interest in well-prepared, ready-to-occupy units
Owners who engage early with redevelopment or leasing strategies will be better positioned as the new system is phased in.
Our View: A Pivotal Moment for Commercial Property Strategy
The proposed rating changes mark a significant shift in Northern Ireland’s approach to managing urban vacancy. While the financial impact on landlords cannot be understated, the direction of travel is clear: passive holding strategies for vacant assets will become increasingly costly.
Now is the time for property owners to reassess their assets, evaluate their options, and plan for a regulatory environment that prioritises activation, regeneration, and economic vibrancy.
At White Water Property Consultants, we support landlords, investors, and developers in navigating these changes — from strategic planning to redevelopment, leasing support, and stakeholder engagement. If you would like tailored advice on how these rate changes may impact your portfolio, our team is here to help.