Business rates can be a significant financial burden for property owners, especially when a property is empty and not generating any income In the UK, business rates are charged on most non-domestic properties, including offices, shops, and warehouses However, there are ways in which property owners can avoid paying business rates on empty properties In this article, we will discuss some strategies that property owners can use to mitigate the impact of business rates on their bottom line.
One of the most effective ways to avoid paying business rates on an empty property is to qualify for the empty property rate relief In England, for example, empty property rate relief is automatically granted for the first three months that a property is empty After the initial three-month period, the property owner may still be eligible for a further three months of relief if the property is an industrial or listed building In Wales, the empty property rate relief period is up to six months for all properties, regardless of their type.
Another way to avoid business rates on an empty property is to actively market the property for rent or sale By demonstrating that efforts are being made to find a new tenant or buyer, property owners can qualify for additional empty property rate relief In England, for example, if a property is actively being marketed, the property owner may be eligible for an additional three months of relief after the initial six-month period This can provide property owners with valuable time to secure a new tenant or buyer without incurring unnecessary costs.
Property owners can also consider temporarily using the property for a charitable purpose in order to qualify for charitable rate relief In England, if a property is used by a charity for charitable purposes, it may be eligible for 80% relief on the business rates avoiding business rates on empty property. This can be a cost-effective solution for property owners who are unable to find a new tenant or buyer for their empty property in the short term.
Furthermore, property owners can explore the option of demolishing the empty property in order to avoid paying business rates In some cases, the cost of demolishing the property may be more affordable than continuing to pay business rates on an empty building By working with local authorities and planning departments, property owners can determine whether demolition is a viable option for avoiding business rates on their empty property.
Alternatively, property owners can consider applying for small business rate relief if their empty property has a rateable value below a certain threshold In England, for example, small business rate relief is available for eligible properties with a rateable value of less than £15,000 By qualifying for small business rate relief, property owners can significantly reduce their business rates liability on empty properties.
It is important for property owners to stay informed about changes to business rates regulations in order to effectively manage the costs associated with empty properties For example, in response to the COVID-19 pandemic, the UK government introduced a one-year holiday on business rates for retail, hospitality, and leisure properties in England This relief has provided much-needed support for businesses struggling to cope with the financial impact of the pandemic.
In conclusion, there are several strategies that property owners can use to avoid paying business rates on empty properties By taking advantage of empty property rate relief, actively marketing the property, using it for charitable purposes, considering demolition, or applying for small business rate relief, property owners can reduce the financial burden of business rates on their bottom line Staying informed about changes to business rates regulations and seeking guidance from professional advisors can help property owners make informed decisions about managing empty properties By utilizing these strategies effectively, property owners can navigate the challenges of owning empty properties and minimize the impact of business rates on their financial wellbeing.