When it comes to owning and maintaining commercial property, one of the biggest challenges for landlords and property owners is dealing with business rates on empty properties. Business rates are charged on most non-residential properties, including shops, offices, warehouses, and factories. These rates can be a significant financial burden, especially if the property remains vacant for an extended period of time.
However, there are ways to legally avoid paying business rates on empty property. In this article, we will discuss some strategies that property owners can use to minimize their business rates liabilities and save money.
1. Temporary occupation
One effective way to avoid paying business rates on empty property is to temporarily occupy the space. This can be done by allowing a temporary tenant or licensee to use the property for a short period of time. By doing so, the property will be considered occupied and may be eligible for exemption from business rates.
There are companies that specialize in finding short-term occupiers for vacant commercial properties. These companies can help property owners find a suitable temporary occupant to occupy the space and avoid paying business rates during that period.
2. Property development
Another way to avoid business rates on empty property is to carry out property development work on the space. By making improvements and renovations to the property, the owner can significantly reduce the property’s rateable value and, in turn, lower the business rates liability.
Property development projects can range from minor refurbishments to complete renovations. By investing in the property and enhancing its value, property owners can not only attract potential tenants but also reduce their business rates liability in the process.
3. Charity or community use
Property owners may also be able to avoid paying business rates on empty property by allowing the space to be used for charitable or community purposes. Non-profit organizations, charities, and community groups are often eligible for business rates relief on properties that they occupy.
By allowing a charity or community group to use the property, the owner may be able to benefit from reduced or exempt business rates. This can be a win-win situation for both the property owner and the organization using the space.
4. Small business rate relief
In some cases, small business rate relief may be available to property owners who own multiple empty properties. This relief is designed to help small businesses that have a low rateable value and may be struggling to pay their business rates.
By applying for small business rate relief, property owners may be able to reduce the amount of business rates they have to pay on empty properties. It is worth checking with the local council to see if this relief is available and if the property owner qualifies for it.
5. Vacant property relief
In certain circumstances, property owners may be eligible for vacant property relief, which provides a temporary exemption from paying business rates on empty properties. This relief is usually available for a limited period, typically up to three or six months, depending on the location of the property.
To qualify for vacant property relief, property owners must meet certain criteria set by the local council. It is important to check with the council to see if the property is eligible for this relief and to apply for it accordingly.
In conclusion, there are several strategies that property owners can use to avoid paying business rates on empty property. By exploring options such as temporary occupation, property development, charity or community use, small business rate relief, and vacant property relief, property owners can minimize their business rates liabilities and save money in the long run. It is advisable to consult with a professional advisor or accountant to determine the best course of action for avoiding business rates on empty property.