When it comes to owning commercial property, one of the biggest concerns for property owners is paying business rates on empty buildings Business rates are a tax that is charged on most non-domestic properties, and can be a significant financial burden for property owners, especially when the property is sitting vacant However, there are ways to legally avoid paying business rates on empty property In this article, we will explore some of the ways that property owners can minimize or eliminate their business rates liability on empty buildings.
1 Applying for Empty Property Rate Relief
One of the most common ways to avoid paying business rates on empty property is by applying for Empty Property Rate Relief This relief allows property owners to receive a 100% discount on their business rates for a specified period of time, usually between three to six months After this initial period, the property owner may still be eligible for a further 50% discount on their business rates.
In order to qualify for Empty Property Rate Relief, the property must be completely empty and not used for any business purposes Property owners must also ensure that the property is in a state of disrepair and cannot be occupied in its current condition It is important to note that the rules surrounding Empty Property Rate Relief vary depending on the local authority, so property owners should check with their council to see what relief is available to them.
2 Entering into a Short-term Lease
Another way to avoid paying business rates on empty property is by entering into a short-term lease agreement with a temporary occupier By doing so, the property will no longer be classified as empty and the occupier will become liable for paying the business rates This can be a mutually beneficial arrangement, as the temporary occupier can use the property for a short period of time while the property owner avoids paying business rates.
It is important to note that entering into a short-term lease agreement may not be suitable for all property owners, as it requires finding a suitable occupier and negotiating lease terms avoiding business rates on empty property. Property owners should also be aware that they may have to pay additional costs associated with leasing the property, such as maintenance and insurance.
3 Developing the Property
Property owners can also avoid paying business rates on empty property by developing the property for a different use By making significant changes to the property, such as converting it into residential units or renovating it for a different type of business, property owners can apply for a temporary exemption from business rates This exemption is known as a “material change of use” and can last for up to three years.
Property owners should be aware that any changes made to the property must be substantial enough to constitute a material change of use It is recommended that property owners consult with a planning consultant or surveyor to ensure that their proposed changes will meet the criteria for a material change of use.
4 Taking Advantage of Small Business Rate Relief
Property owners who own multiple commercial properties may be able to take advantage of Small Business Rate Relief to reduce their business rates liability on empty buildings Small Business Rate Relief is available to business owners who only occupy one property with a rateable value of less than £15,000 Property owners can receive a discount of up to 100% on their business rates, depending on the rateable value of the property.
To qualify for Small Business Rate Relief, property owners must ensure that the property meets the eligibility criteria and submit an application to their local authority Property owners should be aware that they may need to reapply for Small Business Rate Relief each year, as eligibility is reviewed annually.
In conclusion, there are several ways that property owners can legally avoid paying business rates on empty property By applying for Empty Property Rate Relief, entering into a short-term lease, developing the property, or taking advantage of Small Business Rate Relief, property owners can minimize or eliminate their business rates liability on empty buildings It is important for property owners to carefully consider their options and consult with a professional advisor to determine the best course of action for their individual circumstances.