When it comes to owning property for business purposes, there are a number of costs that need to be considered. One of the often overlooked but significant costs is business rates on empty property. This is a topic that is not frequently discussed but can have a big impact on business owners and property investors. In this article, we will delve into what business rates on empty property are, how they are calculated, and what business owners can do to minimize their impact.
business rates on empty property are essentially a tax that is levied on non-residential property that is unoccupied. This tax is meant to discourage property owners from leaving their spaces empty for extended periods of time and encourage them to put their properties to productive use. Business rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). The rateable value is an estimate of the rental value of the property at a specific date.
The amount of business rates that a property owner has to pay on an empty property depends on the rateable value of the property and the policies of the local authority. In England, for example, businesses do not have to pay business rates on empty properties for the first three months. After that initial three-month period, the property owner is liable to pay the full business rates unless they qualify for an exemption or relief.
There are a number of exemptions and reliefs available to property owners that can help lessen the burden of business rates on empty property. For example, small business rate relief can apply to properties with a rateable value below a certain threshold. Some properties may also qualify for industrial or rural rate relief, which can significantly reduce the amount of business rates owed.
If a property owner is unable to find a tenant for their property and is struggling to pay the business rates, they may be eligible for empty property relief. Empty property relief can be granted by the local authority and can provide a temporary reduction or exemption from paying business rates on empty property. It is important to note that the criteria for empty property relief vary by location, so property owners should check with their local authority to see if they qualify.
In addition to exemptions and reliefs, property owners can also take steps to minimize their business rates on empty property. One option is to consider leasing the property out on a short-term basis to avoid paying the full business rates. This can help generate some income and prevent the property from sitting empty for an extended period of time.
Another option is to consider renovating the property to make it more attractive to potential tenants. By investing in improvements and upgrades, property owners may be able to find a tenant more quickly and reduce the amount of time that the property is empty. In some cases, local authorities may offer incentives or discounts on business rates for properties that have been renovated or brought back into use.
Overall, business rates on empty property can be a significant cost for property owners and business owners. However, there are options available to help reduce this financial burden and make owning empty property more manageable. By exploring exemptions, reliefs, and taking proactive steps to find tenants or improve the property, property owners can minimize the impact of business rates on empty property and make the most of their investments.