Business rates on vacant property, also known as empty property rates, can be a costly burden for property owners These rates are charged by local authorities on properties that are unoccupied for an extended period of time The purpose of these rates is to incentivize property owners to keep their properties occupied or to find productive uses for them However, the impact of business rates on vacant property can be significant and can pose challenges for property owners.
Business rates on vacant property are calculated based on the rateable value of the property The rateable value is an estimate of the property’s annual rental value, determined by the Valuation Office Agency The rateable value is then multiplied by the national non-domestic multiplier set by the government to determine the amount of business rates owed on the property.
For small business owners or property investors, business rates on vacant property can be a significant financial burden In some cases, the business rates on an empty property can be as high as 100% of the normal business rates liability This can add up to thousands of pounds each year, making it difficult for property owners to maintain and hold on to vacant properties.
The impact of business rates on vacant property is felt not only by property owners but also by the local community Vacant properties can become eyesores and attract anti-social behavior, posing challenges for local authorities and residents Additionally, vacant properties can have a negative impact on property values in the surrounding area, further exacerbating the issue.
Property owners have options to reduce the impact of business rates on vacant property One common strategy is to seek exemptions or reliefs from the local council business rates vacant property. For example, if a property is undergoing substantial repair works or is in a state of disrepair, the property owner may be eligible for a temporary exemption from business rates Property owners can also apply for empty property relief, which provides a 50% discount on business rates for properties that have been empty for more than three months.
Another option for property owners is to explore alternative uses for their vacant properties By finding new tenants or repurposing the property for a different use, property owners can mitigate the impact of business rates on vacant property This can also have positive benefits for the local community by bringing new businesses and activities to the area.
In some cases, property owners may consider demolishing the vacant property to avoid paying business rates However, this can be a costly and time-consuming process, requiring planning permission and compliance with building regulations Property owners should carefully weigh the costs and benefits of demolishing a vacant property before taking this drastic step.
The government has also taken steps to address the impact of business rates on vacant property In 2021, the government announced a temporary increase in the empty property rate relief from 50% to 100% to help property owners struggling with the economic impacts of the COVID-19 pandemic This relief is set to expire in March 2022, after which property owners will need to reassess their options for managing business rates on their vacant properties.
Overall, the impact of business rates on vacant property can be significant for property owners, local communities, and the economy as a whole Property owners facing high business rates on their vacant properties should explore all available options for reducing this financial burden, including seeking exemptions or reliefs, finding new tenants, or repurposing the property for a different use By taking proactive steps to address business rates on vacant property, property owners can help minimize the negative impact on their finances and the surrounding community.