Business rates can be a significant expense for property owners, especially when their property sits vacant. In the UK, owners of non-domestic properties are required to pay business rates, even if the property is empty. However, there are certain strategies that property owners can implement to minimize or avoid these rates altogether. In this article, we will discuss some of these strategies and how property owners can take advantage of them to reduce their financial burden.
One of the most common ways to avoid business rates on empty property is by taking advantage of exemptions and reliefs. There are several exemptions available to property owners, such as the three-month empty property exemption. This exemption allows property owners to avoid paying business rates for the first three months that their property is empty. After the three-month period, owners will be required to pay the full rate unless they qualify for another exemption or relief.
Another exemption that property owners can potentially qualify for is the six-month empty property exemption. This exemption applies to newly built or renovated properties that have been empty for less than three months. Owners of these properties can apply for an additional three months of exemption, bringing the total exemption period to six months. This can provide a significant cost savings for property owners who are in the process of finding tenants or buyers for their property.
In addition to exemptions, property owners can also apply for reliefs to reduce their business rates liability. One common relief is the small business rate relief, which applies to properties with a rateable value below a certain threshold. Property owners can apply for this relief if their property is used for certain purposes, such as a small shop or office. This can result in a significant reduction in the amount of business rates owed.
Property owners can also explore other ways to reduce their business rates liability, such as subdividing their property into smaller units. By splitting their property into multiple smaller units, owners may be able to qualify for multiple small business rate reliefs, resulting in a lower overall rates bill. This strategy can be particularly effective for owners of larger properties who are struggling to find tenants for the entire space.
Another strategy for avoiding business rates on empty property is to actively market the property for rent or sale. Property owners who can demonstrate that they are actively trying to find a tenant or buyer for their property may be able to qualify for the empty property rate relief. This relief can provide a 50% reduction in business rates for properties that have been empty for more than three months. By actively marketing their property, owners can increase their chances of qualifying for this relief and reducing their rates liability.
Property owners should also be aware of the implications of leaving their property empty for extended periods. In some cases, local authorities may charge a premium on empty properties to encourage owners to bring them back into use. This premium can result in significantly higher rates bills for property owners, making it even more important to find ways to avoid business rates on empty property. By staying informed and proactive, property owners can navigate the complexities of business rates and minimize their financial burden.
In conclusion, business rates on empty property can be a significant expense for property owners, but there are ways to mitigate this burden. By taking advantage of exemptions, reliefs, and other strategies, property owners can reduce their rates liability and avoid unnecessary costs. From applying for exemptions and reliefs to actively marketing their property, there are several steps that owners can take to minimize the impact of business rates on their bottom line. By staying informed and proactive, property owners can successfully navigate the complexities of business rates and ensure that their properties remain financially viable.