business rates on vacant property, also known as empty property rates, can be a significant financial burden for property owners. Whether you own a commercial property that is temporarily vacant or are looking to purchase a property that has been empty for some time, understanding how business rates on vacant property work is essential. In this article, we will explore the intricacies of business rates on vacant property and provide guidance on how to navigate this complex issue.
In the United Kingdom, business rates are a tax levied on most non-domestic properties. These rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). When a property becomes vacant, the owner is still required to pay business rates on the property unless it qualifies for an exemption.
Property owners are often surprised to learn that even if their property is vacant, they may still be liable for business rates. This can be a significant financial burden, particularly for properties that are empty for an extended period. However, there are several exemptions and reliefs available to help alleviate the cost of business rates on vacant property.
One common exemption is the three-month exemption for newly vacant properties. If a property becomes vacant, the owner may be entitled to a three-month exemption from paying business rates. This can provide owners with some temporary relief while they work to secure a new tenant or sell the property.
Another exemption is the six-month exemption for industrial properties. Industrial properties that become vacant may be eligible for a six-month exemption from paying business rates. This can be particularly beneficial for owners of industrial properties that may take longer to find new tenants or buyers.
In addition to exemptions, there are also several reliefs available to help reduce the amount of business rates payable on vacant property. One common relief is the empty property relief, which provides a 100% discount on business rates for certain types of vacant properties. This relief is available for properties that are empty for a specified period, typically six months for commercial properties and three months for industrial properties.
It is important for property owners to be aware of the various exemptions and reliefs available to them and to take advantage of these opportunities to reduce their business rates liability. Failure to do so can result in significant financial consequences, particularly for owners of properties that remain vacant for an extended period.
In some cases, property owners may also be able to negotiate with the local council to reduce their business rates liability on vacant property. Councils have the discretion to grant discretionary relief in certain circumstances, such as when a property is undergoing refurbishment or redevelopment. Property owners should consider engaging with their local council to explore these options and potentially secure a reduction in their business rates liability.
It is also worth noting that there are additional considerations to take into account when purchasing a property that is already vacant. Buyers should be aware that they will inherit the liability for any outstanding business rates on the property, so it is essential to conduct thorough due diligence before completing a purchase. Engaging with a professional advisor who specializes in business rates can help buyers navigate this complex issue and avoid any unexpected financial burdens.
In conclusion, business rates on vacant property can be a significant financial burden for property owners, but there are exemptions and reliefs available to help mitigate this cost. By understanding the various options available and engaging with professionals where necessary, property owners can navigate the complexities of business rates on vacant property and minimize their liability. Whether you own a vacant property or are considering purchasing one, it is essential to be aware of your obligations and explore all available opportunities to reduce your business rates liability.