Property owners and businesses face a significant financial burden when it comes to paying business rates on empty properties. In the United Kingdom, owners of commercial properties are required to pay business rates regardless of whether the property is occupied or vacant. This has led many property owners to seek ways to avoid or reduce these rates in order to alleviate the financial strain. In this article, we will explore some strategies for avoiding business rates on empty property.
One of the most effective ways to avoid business rates on empty property is by utilizing exemptions and reliefs provided by the government. There are several types of exemptions and reliefs available to property owners, such as the Small Business Rate Relief, which provides a discount on rates for properties with a rateable value below a certain threshold. Property owners can also apply for exemptions under the Charitable Rate Relief scheme if the property is used for charitable purposes. Additionally, properties that are undergoing major renovations or structural changes may qualify for a temporary exemption from business rates.
Another strategy for avoiding business rates on empty property is to consider leasing the property to a charity or community group. Properties that are occupied by a charity or used for community purposes may be eligible for 80% mandatory relief on business rates. This not only reduces the financial burden on the property owner but also contributes to the local community by supporting charitable organizations and community initiatives.
For property owners who are unable to lease or sell their empty properties, there are options to reduce business rates through various discounts and reliefs. The government introduced a policy in 2017 that grants a 100% relief on business rates for empty newly built properties for the first 18 months after completion. This provides a grace period for property owners to find tenants or buyers without incurring the full burden of business rates.
Additionally, properties that are unoccupied and undergoing repair or structural changes may be eligible for a 50% discount on business rates for up to three months. This discount can be extended to six months if the property is undergoing major renovations or refurbishments. By taking advantage of these discounts and reliefs, property owners can significantly reduce their business rates liability on empty properties.
Property owners can also explore the option of temporarily repurposing or subletting their empty properties to generate income and reduce business rates. Subletting the property to temporary tenants or short-term occupants can help offset the cost of business rates while the property remains vacant. Property owners can also consider temporary uses such as pop-up shops, events, or exhibitions to generate income and attract potential tenants or buyers.
Another strategy for avoiding business rates on empty property is to challenge the rateable value of the property through the appeals process. Property owners can submit a formal appeal to the Valuation Office Agency (VOA) if they believe that the rateable value of their property is incorrect or unfair. By providing evidence of market rents, property conditions, or other relevant factors, property owners can potentially reduce the rateable value of their property and lower their business rates liability.
In conclusion, there are several strategies available to property owners for avoiding business rates on empty property. By utilizing exemptions and reliefs, leasing to charities or community groups, taking advantage of discounts and reliefs, exploring temporary uses, and challenging the rateable value through appeals, property owners can effectively reduce their business rates liability and alleviate the financial burden of owning empty properties. By implementing these strategies, property owners can protect their investment and contribute to the revitalization of vacant properties in their local communities.