When it comes to owning or managing commercial property, one important aspect that needs to be considered is the payment of business rates. Business rates are a tax that is levied on most non-domestic properties, such as shops, offices, pubs, and warehouses. They are charged by local authorities to help fund local services and are calculated based on the rateable value of the property.
However, there is a provision in the law that provides for a business rates empty property exemption. This exemption allows property owners to claim relief from paying business rates on a property that is empty for a certain period of time. This exemption can be a welcome relief for property owners who may be struggling to find new tenants or are in the process of refurbishing their property.
The business rates empty property exemption, commonly known as section 43 relief, allows for a period of three months exemption from business rates for commercial properties that are empty. This means that property owners do not have to pay business rates on their empty property for the first three months it remains vacant.
After this initial three month period, the property owner can apply for a further three month exemption if they can prove that the property is still undergoing repair or renovation works that prevent it from being occupied. This can be extended for up to a maximum of six months in total.
In order to qualify for the business rates empty property exemption, property owners must notify the local council that the property is vacant. This can usually be done online through the council’s website or by contacting the business rates department directly. It is important to notify the council as soon as the property becomes vacant in order to take advantage of the exemption from the very start.
It is worth noting that the business rates empty property exemption only applies to properties that are completely empty and not being used at all. If a property is being used for storage or is partially occupied, the exemption does not apply and business rates must be paid in full.
There are certain types of properties that are exempt from business rates altogether, even if they are empty. These include properties that are used for certain agricultural purposes, listed buildings, and properties with a rateable value of less than £2,900. These properties do not need to apply for the business rates empty property exemption as they are already exempt from paying business rates.
It is also important to be aware that changes to the business rates empty property exemption were introduced in 2017, which affect properties that have been empty for an extended period of time. Under the new rules, properties that have been empty for more than two years will no longer be eligible for the exemption and will be subject to a full business rates charge.
This change was implemented in order to discourage property owners from leaving properties empty for long periods of time, as empty properties can have a negative impact on the local area and community. By charging full business rates on properties that have been vacant for an extended period, the government aims to incentivize property owners to bring their properties back into use or sell them to someone who can.
Overall, the business rates empty property exemption can provide valuable relief for property owners who find themselves with empty commercial properties. By taking advantage of the exemption, owners can save money on business rates while they work to find new tenants or carry out renovation works on their property. However, it is important to be aware of the rules and regulations surrounding the exemption in order to ensure compliance and avoid any potential penalties.
In conclusion, the business rates empty property exemption is a useful provision that can help property owners navigate the challenges of owning and managing commercial properties. By understanding the rules and requirements of the exemption, property owners can make the most of this relief and minimize their financial burden during periods of vacancy.