Scotland has confirmed a significant change to business rates on vacant premises. According to legislation.gov.uk, the Non-Domestic Rates (Liability for Unoccupied Properties) (Scotland) Act 2026 received Royal Assent on 7 January 2026. The law makes owners liable for non-domestic rates when a commercial property has no occupier, with the change treated as having effect from 1 April 2023. The Act commences the day after Royal Assent.

Practically, this means if a shop, office or warehouse is on the valuation roll but sits empty, the owner pays the rates that would have been due from an occupier. The rating rules apply as if the owner were in occupation, and any local reliefs or remissions still apply. For transparency, the Act inserts a new section 24ZA into the Local Government (Scotland) Act 1966 and updates the Valuation and Rating (Scotland) Act 1956 to align liability across statutes.

The backdating to 1 April 2023 is the key cashflow point. Councils can reconcile past periods of vacancy and seek payment where relief does not cover the bill. Scottish Ministers are empowered to make further regulations, including on the payment or repayment of sums linked to enforcement activity. Those regulations require consultation with representative ratepayers and are subject to the Scottish Parliament’s affirmative procedure, as recorded on legislation.gov.uk.

For landlords and property-owning SMEs, the immediate task is to quantify exposure and map reliefs. As a simple illustration, a unit with a rateable value of £22,500 would face an annual bill equal to that value multiplied by the poundage set each year. Using an illustrative 50p poundage purely for example, the gross charge would be roughly £11,250 before any relief. Actual liabilities depend on the year’s poundage, local policy and any supplements.

Consider a typical high street scenario. A Dundee landlord with a small shop vacant for six months in 2024–25 could now be liable for that period’s rates, minus any empty property relief the council offered. If the unit remained empty into 2025–26, they should budget for continued charges until the space is let or brought into qualifying use. Evidence of active marketing, condition and access can be important when councils assess eligibility for relief.

The legislation preserves local discretion. Owner liability sits alongside schemes under section 3A of the Local Government (Financial Provisions etc.) (Scotland) Act 1962 and regulations under section 153 of the Local Government etc. (Scotland) Act 1994. In plain terms, start with your local authority’s empty property policy because awards differ by area and can change mid-year as budgets and priorities shift.

Tenants should re-read leases before agreeing new terms. While rates are typically a tenant cost during occupation under full repairing and insuring leases, liability during vacancy now falls on the owner unless the contract explicitly provides otherwise for defined handover periods. Expect sharper negotiations on rent‑free periods, break options and who covers rates during dilapidations works.

There are operational ways to manage exposure. Short-term lets, pop‑ups, storage or meanwhile use may reduce or remove liability depending on local rules. The test for genuine occupation is practical, not cosmetic, so keep robust records of dates, activities and any licences or sublets. Speak to your council’s rates team before changing use and retain marketing evidence if a unit remains vacant.

Administration and enforcement detail will follow. The Act allows Ministers to set how payments or repayments tied to enforcement should be handled and requires consultation before rules are laid. That leaves room to clarify how past enforcement interacts with the shift to owner liability, including any repayments where costs have already been incurred.

For planning purposes, pin the dates. Royal Assent was 7 January 2026; commencement is 8 January 2026; and the liability change is treated as in force since 1 April 2023. Owners should revisit 2023–24 and 2024–25 accounts, model 2025–26 exposure, assemble vacancy evidence and open dialogue with their council on reliefs. Market Pulse UK will track the consultation and provide practical updates as regulations appear.