When it comes to owning commercial property, one of the biggest challenges for landlords and property owners is dealing with business rates on empty properties These rates can be a significant financial burden, especially if the property remains vacant for an extended period of time However, there are strategies that can be employed to minimize or even avoid paying business rates on empty property.
Business rates are a tax that is levied on non-domestic properties in the UK These rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA) The rates are typically paid by the occupier of the property, but if the property is vacant, the responsibility falls on the owner.
There are several exemptions and reliefs that property owners can take advantage of to reduce or eliminate business rates on empty property One common way to avoid paying business rates on empty property is to apply for an exemption under the “small business rate relief” scheme This scheme is available to properties with a rateable value below a certain threshold, and can provide significant savings for qualifying properties.
Another option for property owners is to apply for a “charitable rate relief” if the property is being used for charitable purposes Properties that are used for charitable purposes, such as community centers or charity shops, may be eligible for relief from business rates.
Property owners can also apply for a “hardship relief” if they can demonstrate that paying the business rates would cause financial hardship This relief is typically granted on a case-by-case basis, and property owners will need to provide evidence of their financial situation to support their application.
In addition to these reliefs, there are other strategies that property owners can employ to avoid paying business rates on empty property One option is to explore the possibility of letting the property to a temporary tenant avoiding business rates on empty property. By doing so, the property may no longer be considered vacant, and the responsibility for paying business rates may shift to the tenant.
Property owners can also consider demolishing the property if it is no longer viable or cost-effective to maintain By demolishing the property, the owner may be able to avoid paying business rates altogether However, it’s important to note that there are specific regulations and procedures that must be followed when demolishing a property, so property owners should seek professional advice before taking this course of action.
Another option for property owners is to consider converting the property for a different use For example, converting a commercial property into residential units can change the rateable value of the property and may qualify for a different rate relief Property owners should consult with a professional surveyor or valuation expert to determine the best course of action for their specific property.
In some cases, property owners may choose to challenge the rateable value of their property with the VOA If the rateable value is determined to be incorrect or outdated, property owners may be able to have it reduced, which in turn would lower their business rates liability.
Overall, there are a variety of strategies that property owners can employ to avoid paying business rates on empty property By taking advantage of exemptions and reliefs, exploring alternative uses for the property, or challenging the rateable value, property owners can minimize the financial burden of business rates on vacant properties It’s important for property owners to stay informed about their options and seek professional advice to ensure that they are taking the most appropriate course of action for their specific circumstances.
By being proactive and strategic, property owners can navigate the challenges of business rates on empty property and find ways to minimize their financial impact.