When it comes to owning commercial property, there are many costs and expenses that need to be considered. One such expense that property owners need to be aware of is business rates on vacant property. These rates can often be overlooked or misunderstood, but they are a crucial aspect of owning and managing vacant commercial properties.
Business rates are taxes that are charged on most non-domestic properties, including commercial and industrial properties. These rates are set by the local government and are used to fund local services and infrastructure. The amount of business rates that a property owner has to pay is based on the rateable value of the property, which is assessed by the Valuation Office Agency.
When a commercial property is vacant, the property owner is still liable to pay business rates on that property. This is because the property is still considered to have a rateable value, even if it is not currently being used or generating any income. The idea behind this is to prevent property owners from leaving properties empty for extended periods of time, as this can have a negative impact on local communities and economies.
However, there are some exceptions and reliefs that property owners may be eligible for when it comes to business rates on vacant property. For example, if a property is undergoing renovation or repairs, the property owner may be able to apply for a temporary exemption from paying business rates. This exemption is usually granted for a limited period of time, typically around three months, but it can provide some financial relief to property owners who are investing in their properties.
Another relief that property owners may be eligible for is the empty property relief. This relief provides a 100% discount on business rates for certain types of vacant properties, such as industrial or warehouse properties, for a period of three months. After this initial three-month period, the discount is reduced to 10%. However, it is important to note that not all vacant properties are eligible for this relief, and property owners should check with their local council to see if they qualify.
It is also worth mentioning that property owners who are unable to find a tenant for their vacant property may be able to apply for hardship relief. This relief is granted on a case-by-case basis and is intended to provide financial assistance to property owners who are struggling to pay their business rates due to circumstances beyond their control. Property owners can contact their local council to find out more about hardship relief and how to apply for it.
In addition to these reliefs, there are also ways that property owners can reduce their business rates liability on vacant property. For example, property owners can apply for a material change of circumstances if they believe that the rateable value of their property has been overassessed. This can result in a reduction in the amount of business rates that the property owner has to pay.
Property owners can also consider marketing their vacant property for temporary uses, such as pop-up shops or events. By doing this, property owners can generate some income from their vacant property, which can help to offset the costs of paying business rates. In some cases, local councils may also offer discounts or exemptions for properties that are used for temporary purposes, so it is worth exploring this option for vacant properties.
Overall, it is important for property owners to be aware of their obligations when it comes to business rates on vacant property. By understanding the rules and regulations surrounding business rates, property owners can take advantage of any reliefs and exemptions that they may be eligible for, as well as explore other ways to reduce their liability. Being proactive and strategic in managing business rates on vacant property can help property owners to minimize their expenses and make the most of their investments.