Business rates can be a significant expense for property owners, especially when a property is sitting empty and generating no income. However, there are ways to avoid or reduce these rates on empty property legally. In this article, we will discuss some strategies that property owners can use to minimize their business rates liability on vacant properties.
One of the most common ways to avoid paying business rates on empty property is to qualify for an exemption. In the UK, properties that are unoccupied for a certain period of time may be eligible for a temporary exemption from business rates. The length of this exemption period varies depending on the type of property and its location. For example, industrial properties may be exempt for up to six months, while commercial properties may be exempt for up to three months.
To qualify for a business rates exemption on empty property, the owner must notify the local council of the vacancy and provide evidence of the property’s empty status. It is important to keep detailed records of the date on which the property became vacant and any efforts that have been made to re-let or sell the property. Failure to provide this information to the council may result in the property owner being charged the full business rates amount.
Another strategy for avoiding business rates on empty property is to temporarily occupy the property with a minimal presence. This could involve using the property for storage purposes or keeping it minimally furnished with only essential items. By doing so, the property may be classified as being in “occupation” rather than empty, which could qualify it for a reduced rate of business rates.
Property owners can also consider seeking a valuation officer’s decision on the rateable value of their empty property. If the rateable value of the property is deemed to be below a certain threshold, the owner may be eligible for a small business rates relief, which could significantly reduce the amount of business rates payable on the property.
In some cases, property owners may choose to demolish or substantially refurbish their empty property in order to avoid paying business rates. If the property is undergoing major reconstruction or redevelopment works, it may be eligible for a full exemption from business rates for a period of time. However, property owners should be aware that they may still be liable for business rates on any part of the property that is still in use or occupied.
Property owners should also be aware of the implications of leaving a property empty for extended periods of time. In some cases, local authorities may levy a 50% premium on business rates for properties that have been empty for more than two years. This premium is intended to discourage property owners from leaving properties vacant for long periods of time and to incentivize them to bring their properties back into use.
Overall, there are several strategies that property owners can use to avoid or reduce their liability for business rates on empty property. By taking advantage of exemptions, seeking a valuation officer’s decision, temporarily occupying the property, or considering demolition or refurbishment, property owners can minimize the financial burden of business rates on their vacant properties. It is important for property owners to stay informed about the regulations and guidelines surrounding business rates and to seek professional advice if needed to ensure compliance with the law. By utilizing these strategies effectively, property owners can mitigate the costs of empty property and make the most of their real estate investments.