Business rates can be a significant expense for property owners, especially when the property sits empty. Empty properties are subject to business rates just like occupied ones, and this can be a hefty financial burden for owners. However, there are ways to legally avoid paying business rates on empty property. In this article, we’ll discuss some strategies that property owners can utilize to reduce or eliminate their business rates liabilities.
Firstly, it’s important to understand the rules surrounding business rates on empty property. In England and Wales, empty commercial buildings are generally exempt from business rates for the first three months. After this period, the property owner is required to pay the full business rates unless they are eligible for a specific exemption or relief.
One way to avoid business rates on empty property is to actively market the property for sale or rental. If the property is being actively marketed with the intention of letting or selling it, the owner may be eligible for an exemption from business rates for up to 18 months. This can provide a significant financial reprieve for property owners who are struggling to find tenants or buyers.
Another option for avoiding business rates on empty property is to apply for a charitable or community interest exemption. If the property is being used for charitable purposes or is held in the public interest, the owner may be eligible for relief from business rates. This can be a good option for property owners who are willing to allow their empty property to be used for socially beneficial purposes.
Property owners can also consider demolishing or refurbishing their empty property to avoid business rates. If the property is undergoing significant structural changes, such as demolition or refurbishment, the owner may be eligible for a temporary exemption from business rates. This can provide a financial incentive for owners to invest in their property and bring it back into productive use.
In some cases, property owners may be able to claim hardship relief to reduce their business rates liabilities on empty property. If the owner can demonstrate that paying the full business rates would cause them undue financial hardship, they may be able to negotiate a reduced rate with the local council. Hardship relief is typically granted on a case-by-case basis, so owners will need to provide evidence of their financial difficulties.
Additionally, property owners can explore the option of appealing their business rates assessment to reduce their liabilities on empty property. If the owner believes that the rateable value of their property has been calculated incorrectly, they can submit an appeal to the Valuation Office Agency. A successful appeal can result in a lower rateable value and reduced business rates bills for the property owner.
It’s also worth noting that there are specific exemptions and reliefs available for certain types of empty property. For example, listed buildings are generally exempt from business rates when empty, as are certain types of industrial premises. Property owners should research these exemptions and reliefs to see if they are eligible for any additional savings on their business rates bills.
In conclusion, business rates on empty property can be a significant financial burden for property owners. However, there are ways to legally avoid paying business rates or reduce the liabilities on empty property. By actively marketing the property, exploring exemptions and reliefs, investing in refurbishment or demolition, claiming hardship relief, appealing the business rates assessment, and researching specific exemptions, property owners can take steps to minimize their business rates obligations and alleviate some of the financial pressure associated with owning empty property.