Business rates on empty property can be a significant financial burden for property owners. In the United Kingdom, non-domestic properties are subject to business rates whether they are occupied or vacant. This means that property owners can face substantial costs when their properties are empty and not generating income. However, there are several strategies that property owners can use to minimize or even avoid these business rates altogether. In this article, we will discuss five effective strategies for avoiding business rates on empty property.
1. Apply for Empty Property Relief
One of the most common ways to reduce or avoid business rates on empty property is to apply for Empty Property Relief. This relief is available to certain types of properties that have been empty for a set period of time. The length of time that a property must be empty before it qualifies for Empty Property Relief varies depending on the location of the property. In some cases, properties may be eligible for 100% relief for a certain period, after which the relief may be reduced.
Property owners should check with their local council to determine if their property is eligible for Empty Property Relief and to find out how to apply. It is important to keep in mind that each council has its own rules and guidelines for granting Empty Property Relief, so property owners should be sure to follow the specific requirements in their area.
2. Develop the Property
Another effective strategy for avoiding business rates on empty property is to develop the property in some way. By making improvements or changes to the property, property owners may be able to qualify for exemptions or discounts on their business rates. For example, if a property is undergoing renovation or construction work, it may be considered exempt from business rates for a certain period.
Property owners should consider investing in improvements to their empty properties to make them more attractive to potential tenants or buyers. By developing the property, owners can increase their chances of generating income from the property and avoid paying business rates on an empty building.
3. Apply for Charitable Relief
Property owners who own empty properties that are used by charities or for charitable purposes may be eligible for Charitable Relief on their business rates. Charitable Relief is available to properties that are used for charitable purposes and can provide significant savings on business rates.
To qualify for Charitable Relief, property owners must be able to prove that the property is used for charitable activities and that the organization using the property is a registered charity. Property owners should contact their local council to find out more information about applying for Charitable Relief and to determine if their property is eligible.
4. Temporary Letting
Another strategy for avoiding business rates on empty property is to consider temporarily letting the property to another party. By doing so, property owners may be able to qualify for exemptions or reductions on their business rates. Temporary letting can provide a source of income for property owners while they search for a long-term tenant or buyer for the property.
Property owners should be sure to consult with their local council before entering into a temporary letting agreement to ensure that they are still eligible for any exemptions or reductions on their business rates. It is also important to carefully review the terms of the temporary letting agreement to ensure that it complies with all legal requirements.
5. Negotiate with the Local Council
Property owners who are struggling to pay business rates on empty property should consider negotiating with their local council. In some cases, councils may be willing to work with property owners to find a solution that is mutually beneficial. For example, councils may be open to reducing business rates for properties that have been on the market for an extended period without attracting any interest.
Property owners should be prepared to provide evidence to support their case and to demonstrate that they are actively trying to rent or sell the property. By engaging in open and honest communication with the council, property owners may be able to reach a favorable resolution that helps them avoid paying excessive business rates on empty property.
In conclusion, there are several strategies that property owners can use to avoid business rates on empty property. By applying for Empty Property Relief, developing the property, applying for Charitable Relief, considering temporary letting, and negotiating with the local council, property owners can reduce or even eliminate the financial burden of business rates on empty property. Property owners should carefully consider their options and take proactive steps to minimize their business rates obligations.