When it comes to owning commercial property, one of the biggest challenges that owners face is paying business rates on empty properties Business rates are taxes that commercial property owners must pay to their local authority, regardless of whether the property is occupied or vacant With these rates often being a significant expense, many property owners are looking for ways to avoid or reduce their business rates on empty property In this article, we will explore some strategies that property owners can use to minimize their business rates burden.
One of the most common ways that property owners try to avoid paying business rates on empty property is by applying for an exemption In the UK, there is a scheme called the Empty Property Rates Relief that allows property owners to apply for a temporary exemption from paying business rates on empty property This relief is usually available for a limited period, such as three months for industrial properties and six months for offices and shops Property owners must apply to their local council for this relief, and approval is not guaranteed.
Another strategy that property owners can use to reduce their business rates on empty property is by taking advantage of the Small Business Rates Relief This relief is available to businesses that operate from small premises with a rateable value below a certain threshold If a property owner can temporarily convert their empty property into a small business, they may be able to qualify for this relief and reduce their business rates burden.
Property owners can also consider entering into a short-term lease agreement with a temporary tenant By leasing out their empty property for a short period, property owners can avoid paying business rates on the property while generating some rental income avoiding business rates on empty property. This can be a win-win situation for both parties, as the temporary tenant gets a space to operate their business, and the property owner avoids the expense of business rates on an empty property.
Additionally, property owners can explore the option of appealing their property’s rateable value to the Valuation Office Agency (VOA) The rateable value of a property is used to calculate the amount of business rates that the owner must pay If a property owner believes that their property’s rateable value is too high, they can submit an appeal to the VOA to have it reassessed If successful, this can result in a lower rateable value and a reduced business rates bill.
Furthermore, property owners can consider taking advantage of the government’s Renovation Relief scheme This scheme allows property owners to claim a temporary exemption from paying business rates on an empty property that is undergoing renovation or structural repairs To qualify for this relief, property owners must provide evidence that the property is undergoing substantial works to bring it back into use This can be a valuable option for property owners who are looking to improve their property while avoiding the expense of business rates.
In conclusion, there are several strategies that property owners can use to avoid or reduce their business rates on empty property From applying for exemptions and relief schemes to appealing rateable values and leasing out space to temporary tenants, property owners have options to minimize their business rates burden By being proactive and exploring these strategies, property owners can effectively manage their business rates on empty properties and optimize the financial performance of their real estate investments.