Business rates can be a significant expense for property owners, especially when a property is sitting empty and generating no income In the UK, owners of commercial properties are required to pay business rates even if the property is vacant However, there are ways to reduce or avoid these rates altogether In this article, we will discuss five strategies that property owners can use to avoid business rates on empty property.
1 Temporary Occupation
One way to avoid business rates on empty property is to temporarily occupy the space By allowing a temporary tenant to occupy the property even for a short period of time, the property can qualify for an exemption from business rates This can be a win-win situation for both parties, as the temporary tenant gets to use the space at a reduced cost while the property owner avoids paying business rates.
There are various ways to find temporary occupants for your empty property, such as leasing the space to pop-up shops, artists, or community groups You can set up a short-term lease agreement with the temporary tenant to specify the terms of occupation and ensure that the property remains exempt from business rates.
2 Property Development
Another effective strategy to avoid business rates on empty property is to carry out property development works By making significant changes to the property, such as refurbishing, extending, or converting it into a different type of space, the property may qualify for an exemption from business rates for a certain period of time.
Property development works can not only help you avoid paying business rates on empty property but also increase the value of the property in the long run Before carrying out any development works, it is important to check with the local council to understand the requirements for qualifying for a rates exemption.
3 Charitable Occupation
If you are unable to find a temporary tenant for your empty property, you can consider allowing a charitable organization to occupy the space avoiding business rates on empty property. Properties occupied by registered charities are eligible for an 80% discount on business rates, which can significantly reduce the financial burden on property owners.
Charitable occupation can be a great way to support a good cause while also benefiting from a rates discount However, it is important to ensure that the charity is a registered organization and that the occupation is in line with the charity’s objectives.
4 Small Business Rates Relief
For properties with a rateable value below a certain threshold, owners may be eligible for small business rates relief This relief scheme is designed to support small businesses and can reduce the amount of business rates payable on empty property.
To qualify for small business rates relief, the property must be used for business purposes and have a rateable value below the threshold set by the local council Property owners can apply for this relief scheme directly with the council to benefit from the rates discount.
5 Appeal the Rateable Value
If you believe that the rateable value of your empty property is inaccurate, you can appeal the valuation with the Valuation Office Agency (VOA) By providing evidence to support your claim, such as rental evidence of similar properties in the area or details of any physical changes to the property, you may be able to reduce the rateable value and lower the amount of business rates payable.
Appealing the rateable value of your property can be a time-consuming process, but it can result in significant cost savings in the long term It is important to seek professional advice from a chartered surveyor or property consultant to ensure that your appeal is successful.
In conclusion, property owners have several strategies at their disposal to avoid paying business rates on empty property Whether through temporary occupation, property development, charitable occupation, small business rates relief, or appealing the rateable value, there are ways to reduce or eliminate the financial burden of business rates By exploring these strategies and seeking professional advice where necessary, property owners can make the most of their empty properties without incurring unnecessary costs.