Business rates can be a significant financial burden for property owners, especially when a property sits empty for an extended period. In the UK, owners of commercial properties are required to pay business rates on empty properties if they remain unoccupied for a certain period of time. However, there are strategies that owners can use to avoid paying business rates on empty property legally. In this article, we will explore some of these strategies and provide tips for property owners looking to minimize their business rate liabilities.
One common misconception is that property owners must pay business rates on empty properties regardless of the circumstances. While it is true that business rates are typically levied on empty properties, there are several exemptions and reliefs available that can help owners reduce or completely avoid paying these rates. Understanding these exemptions and taking advantage of them can result in significant cost savings for property owners.
One of the most common ways to avoid paying business rates on empty property is by applying for an exemption known as the “empty property rate relief.” This relief applies to properties that have been empty for a certain period and can provide owners with a temporary reprieve from paying business rates. In England, for example, properties with a rateable value of less than £2,900 are completely exempt from business rates for as long as they remain empty. Properties with a rateable value between £2,900 and £12,000 are also eligible for relief, with business rates payable at a reduced rate.
Another option for property owners looking to avoid paying business rates on empty property is to apply for the “charitable rate relief.” This relief is available to properties that are occupied by charities or are used for charitable purposes. Property owners who lease their vacant properties to registered charities can qualify for this relief and avoid paying business rates on the property.
Additionally, property owners who are unable to find a tenant for their empty property may be eligible for the “unoccupied property rate relief.” This relief provides a 100% discount on business rates for the first three months that a property remains empty. After the initial three-month period, the property owner may still be eligible for a 50% discount on the business rates for an additional three months. This relief can provide property owners with some breathing room as they search for a new tenant or buyer for their empty property.
In some cases, property owners may be able to avoid paying business rates on empty property by temporarily using the property for certain purposes. For example, owners could consider using the property for charitable events, temporary storage, or community projects. By demonstrating that the property is being actively used for a temporary purpose, owners may be able to qualify for exemptions or relief that can help reduce their business rate liabilities.
It is essential for property owners to stay informed about the rules and regulations regarding business rates on empty property to ensure compliance and avoid unnecessary financial burdens. Property owners should familiarize themselves with the various exemptions and reliefs available to them and consider seeking professional advice if they are unsure about their eligibility for relief.
In conclusion, avoiding business rates on empty property is possible with careful planning and knowledge of the available exemptions and reliefs. By taking advantage of these options, property owners can minimize their financial liabilities and potentially save a significant amount of money on business rates. Property owners should explore all available options and consider seeking professional advice to ensure they are taking full advantage of the opportunities to reduce their business rate liabilities.