Business rates on vacant property can be a significant financial burden for property owners and landlords These rates are charges that must be paid to the local government on any non-residential property that is empty and unoccupied In this article, we will explore the concept of business rates on vacant property, how they are calculated, and what property owners can do to mitigate these costs.
Business rates are a form of property tax that is charged on most non-residential properties in the UK, including shops, offices, warehouses, and factories These rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA) The VOA assigns a rateable value to each property based on factors such as location, size, and usage.
When a non-residential property becomes vacant and unoccupied, the owner is still required to pay business rates on the property However, the rules around business rates on vacant property are slightly different from those on occupied property In general, property owners are entitled to a period of empty property rate relief, which exempts them from paying business rates for a certain period of time.
The period of empty property rate relief varies depending on the type of property For example, most non-residential properties are entitled to three months of empty property rate relief, after which the full business rates must be paid However, certain types of properties, such as industrial properties, are entitled to a longer period of empty property rate relief, usually 6 months.
After the period of empty property rate relief has expired, property owners are required to pay the full business rates on the property This can be a significant financial burden, especially for properties that remain vacant for an extended period of time business rates vacant property. In addition to the regular business rates, property owners may also be required to pay an additional 50% premium on properties that have been empty for more than 2 years.
So, what can property owners do to mitigate the costs of business rates on vacant property? One option is to consider applying for the various forms of relief and exemptions that are available For example, properties with a rateable value of less than £2,900 are eligible for small business rate relief, which can significantly reduce the amount of business rates that need to be paid.
Another option is to consider leasing out the property on a temporary basis By leasing out the property, even for a short period of time, property owners can avoid paying the full business rates on the property This can be a win-win situation for both the property owner and the tenant, as the property owner can generate some income from the property while the tenant benefits from a temporary space.
Property owners may also consider applying for hardship relief if they are struggling to pay the business rates on a vacant property Hardship relief is a form of discretionary relief that is granted by the local authority in cases where the property owner can demonstrate that paying the full business rates would cause them undue financial hardship However, it is important to note that hardship relief is not guaranteed and is subject to approval by the local authority.
In conclusion, business rates on vacant property can be a significant financial burden for property owners and landlords However, there are options available to help mitigate these costs, such as applying for empty property rate relief, small business rate relief, and hardship relief Property owners should carefully consider their options and seek advice from a professional if they are struggling to pay the business rates on a vacant property By taking the necessary steps, property owners can minimize the financial impact of business rates on vacant property and potentially generate income from their empty properties.