Business rates are taxes that businesses in the UK have to pay on the properties they occupy. However, what many don’t realize is that these rates also apply to empty properties. In this article, we will explore the concept of business rates on empty property and what it means for property owners.
When a business property becomes vacant, the owner of the property is still liable to pay business rates on it. This is because the property is still considered to have a rateable value, regardless of whether it is being used or not. The rationale behind this is to discourage property owners from leaving their properties empty for extended periods of time, as vacant properties can have a negative impact on the local economy and community.
The rateable value of a property is determined by the Valuation Office Agency (VOA), based on factors such as its size, location, and intended use. The business rates on an empty property are calculated at the same rate as they would be if the property were occupied. This means that property owners could end up paying significant amounts of money in rates for properties that are not generating any income.
There are some exemptions and reliefs available for owners of empty properties. For example, properties that are undergoing repairs or renovations may qualify for a temporary exemption from business rates. This exemption usually lasts for three months, after which the property owner will be required to start paying rates again. Similarly, newly built properties are exempt from business rates for the first three months after they are completed.
Another relief that property owners can apply for is called the empty property rate relief. This relief allows property owners to get a 100% discount on their business rates for a limited period of time. The length of time that this relief is available varies depending on the location of the property. In some areas, property owners may be able to get the relief for up to three months, while in others it may be for as long as six or even twelve months.
Despite these exemptions and reliefs, the burden of paying business rates on empty properties can still be significant for property owners. This is especially true for those who own multiple vacant properties or properties that have been empty for an extended period of time. In some cases, property owners may find themselves struggling to keep up with the payments, leading to financial difficulties and even risking losing their properties.
One way that property owners can reduce the impact of business rates on empty properties is by actively marketing the properties for rent or sale. By finding a tenant or buyer for the property, owners can start generating income from it and thus reduce the amount of rates they have to pay. In some cases, property owners may even be able to negotiate a deal with their local council to reduce the rates on the property if they can demonstrate that they are actively trying to find a tenant or buyer.
It is also worth noting that there are certain types of properties that are exempt from business rates altogether. These include agricultural land and buildings, fish farms, buildings used for training or welfare, and properties owned by charities or community amateur sports clubs. Property owners who believe that their property may qualify for an exemption should contact their local council or a professional advisor to get more information.
In conclusion, business rates on empty properties can be a significant financial burden for property owners. However, there are exemptions and reliefs available that can help reduce this burden. Property owners should explore their options and take proactive steps to minimize the impact of these rates on their finances. By understanding the rules and regulations surrounding business rates on empty properties, owners can make informed decisions and avoid unnecessary financial strain.