When it comes to owning commercial property, one of the common concerns for landlords and property owners is avoiding costly business rates on empty buildings. Business rates can be a significant expense, especially for properties that are not generating any income. However, there are ways to mitigate this financial burden and potentially avoid paying business rates on empty property altogether.
Business rates are taxes that are levied on non-domestic properties, including shops, offices, warehouses, and other commercial buildings. These rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). Property owners are required to pay business rates whether their buildings are occupied or not, which can be a major financial strain for landlords with empty properties.
Fortunately, there are several strategies that property owners can employ to avoid or reduce business rates on empty property. One common tactic is to claim an exemption or relief on the property. There are several exemptions and reliefs available that can significantly reduce the amount of business rates owed on empty commercial buildings.
One of the most common exemptions is the six-month empty property rate relief. This relief allows property owners to claim a full exemption on business rates for the first six months that a property is empty. After the initial six-month period, landlords will be required to pay the full rate unless they qualify for another exemption or relief.
Another option for avoiding business rates on empty property is to claim the small business rate relief. This relief is available for properties with a rateable value of less than £15,000 and can provide significant savings on business rates. Property owners should check with their local council to see if they qualify for this relief.
In addition to exemptions and reliefs, property owners can also take steps to reduce the rateable value of their empty buildings. This can be achieved by making improvements to the property or changing its use to a lower-rated category. By reducing the rateable value of the property, landlords can lower the amount of business rates they are required to pay.
Property owners should also be aware of the various exemptions and reliefs available for specific types of properties. For example, agricultural buildings are eligible for 100% relief on business rates, while certain listed buildings may qualify for exemptions based on their historic significance.
It is important for property owners to stay informed about changes to business rates legislation and take advantage of any available exemptions or reliefs. By staying proactive and strategic, landlords can minimize the financial impact of business rates on their empty properties.
In some cases, property owners may also consider leasing or renting out their empty buildings to temporary occupants. This can help generate income and potentially qualify for exemptions or reliefs on business rates. However, landlords should be cautious when renting out their properties, as this can lead to other legal and financial responsibilities.
Overall, avoiding business rates on empty property requires careful planning and strategic decision-making. By exploring all available options for exemptions, reliefs, and rate reductions, property owners can minimize the financial burden of business rates on their empty buildings.
In conclusion, business rates on empty property can be a significant expense for landlords and property owners. However, there are ways to mitigate this financial burden and potentially avoid paying business rates altogether. By claiming exemptions and reliefs, reducing the rateable value of the property, and staying informed about changes to legislation, property owners can take proactive steps to minimize the impact of business rates on their empty buildings.