When a commercial property sits empty, it can have significant financial implications for the owner Not only is the property not generating income, but there are additional costs that may come into play, such as business rates Business rates are a tax levied on non-domestic properties in the UK, and they apply even when a property is vacant In this article, we will explore the impact of business rates on vacant property and what owners can do to minimize their financial burden.
Business rates are a local tax that is based on the rateable value of a property The rateable value is assessed by the Valuation Office Agency (VOA) and represents the rental value of the property at a specific point in time Business rates help fund local services such as schools, roads, and waste collection and are paid by the occupier or owner of the property.
When a commercial property becomes vacant, the responsibility for paying business rates falls to the owner This can be a significant financial burden, especially for properties that remain empty for long periods of time In some cases, the business rates payable on a vacant property can exceed the rates that would be payable if the property were occupied This can put a strain on property owners, particularly during times of economic downturn when finding tenants can be challenging.
One way that property owners can mitigate the impact of business rates on vacant property is by seeking exemptions or relief In some cases, certain types of properties may be exempt from business rates, such as agricultural land or buildings with a rateable value below a certain threshold Owners of vacant properties may also be eligible for relief schemes, such as the Empty Property Rate Relief scheme, which provides a 100% discount on business rates for the first three months that a property is empty business rates vacant property. After this initial period, the property may be eligible for a further 50% discount on business rates.
Property owners can also take steps to reduce their liability for business rates by actively marketing the property for rent or sale In some cases, if a property is actively being marketed, the owner may be eligible for the Empty Property Relief scheme, which provides a 100% discount on business rates for the first three months that a property is empty This can provide a much-needed financial buffer for property owners while they seek to secure a tenant.
Another option for property owners facing high business rates on vacant property is to consider leasing the property on a short-term basis By leasing the property to a temporary tenant, the owner can transfer the liability for paying business rates to the occupier This can provide a steady income stream for the owner while also alleviating the financial burden of business rates on the vacant property.
Property owners should also be aware of their rights and responsibilities when it comes to business rates on vacant property It is important to keep accurate records of when the property became vacant and to notify the local authority as soon as possible Failure to do so could result in penalties or fines, adding further to the financial strain on the owner.
In conclusion, business rates can have a significant impact on vacant property, placing a financial burden on owners who are already dealing with the challenges of finding tenants However, by seeking exemptions, actively marketing the property, or leasing it on a short-term basis, owners can reduce their liability for business rates and help to alleviate some of the financial pressure It is important for property owners to be aware of their rights and responsibilities when it comes to business rates on vacant property and to take proactive steps to minimize their financial burden.