When it comes to owning commercial property, one significant concern for landlords is the burden of paying business rates on empty properties Business rates are taxes levied on non-residential properties, such as shops, offices, and warehouses These rates can be a financial strain for property owners, especially when the property is vacant and not generating any rental income
In the UK, business rates on empty properties can be a significant expense, with rates usually being set at around 50% of the full occupied rate after three months of vacancy for most commercial properties However, there are several ways in which landlords can avoid or reduce their business rates liability on empty properties
One option for landlords looking to avoid business rates on empty property is to secure temporary tenants By allowing a temporary tenant to occupy the property, even for a short period, landlords may be able to claim an exemption from paying business rates This is because if a property is occupied for a short period by a temporary tenant, the property is considered to be in use and therefore exempt from business rates Landlords can benefit from this exemption even if the property is occupied for as little as six weeks.
Another way to avoid business rates on empty property is by applying for an exemption or relief In some cases, landlords may be eligible for exemptions or reliefs that can significantly reduce their business rates liability For example, properties undergoing refurbishment or structural changes may be eligible for a three-month exemption from business rates Additionally, properties that are exempt from business rates for certain reasons, such as being used for charitable purposes or agricultural activities, can also benefit from relief Landlords should thoroughly investigate the options available to them and make the necessary applications to reduce their business rates liability.
Furthermore, landlords can consider applying for empty property relief avoiding business rates on empty property. This relief is available to property owners who have properties that have been empty for an extended period In England, properties that have been empty for more than three months may be eligible for a 100% relief from business rates for the next three months After this initial three-month period, the relief may be reduced to 50% of the full occupied rate for the next three months, providing landlords with some financial respite during the period of vacancy.
Another way to avoid business rates on empty property is by exploring the option of demolishing the property If a property is beyond repair or has no foreseeable use, landlords may consider demolishing the property to avoid paying business rates Once a property has been demolished, it is no longer considered a taxable entity, and landlords can save on business rates costs However, landlords should be aware of the costs associated with demolition and seek professional advice before taking this step.
Moreover, landlords can consider appealing their business rates assessment It is not uncommon for properties to be incorrectly assessed for business rates, leading to higher charges for the landlord By appealing the assessment, landlords can challenge the rateable value of the property and potentially reduce their business rates liability Landlords should gather evidence to support their appeal, such as rental evidence of similar properties in the area, and seek the advice of a professional surveyor to navigate the appeals process successfully.
In conclusion, there are several ways in which landlords can avoid or reduce business rates on empty properties From securing temporary tenants to applying for exemptions and reliefs, landlords have options to lessen the financial burden of business rates on vacant properties By exploring these strategies and seeking professional advice where necessary, landlords can minimize their business rates liability and mitigate the costs associated with owning empty commercial properties.