Business rates can be a significant financial burden for property owners, especially when a property sits empty. In the UK, properties that are empty and not in use are still subject to business rates, which can add up to thousands of pounds in costs each year. However, there are ways to mitigate or even avoid business rates on empty property. In this article, we will explore some strategies for property owners to reduce their business rate liabilities and save money.
One of the most common ways to avoid business rates on empty property is to qualify for an exemption. In the UK, certain types of properties are eligible for exemptions from business rates, including properties that are undergoing major renovation or repair. If a property is uninhabitable due to structural issues or is in the process of being renovated, the property owner can apply for an exemption from business rates for a temporary period.
To qualify for this exemption, the property owner must provide evidence of the renovations or repairs being carried out, such as planning permission, building permits, or contractor invoices. Once the property is deemed uninhabitable or undergoing major works, the local council may grant an exemption from business rates for a set period, typically up to 12 months. This can provide property owners with some relief from the financial burden of business rates on an empty property.
Another strategy for avoiding business rates on empty property is to actively market the property for rent or sale. In the UK, properties that are actively being marketed for rent or sale may qualify for a temporary exemption from business rates. This is known as the “empty property rates relief” and can provide property owners with relief from business rates for a set period, typically up to three months.
To qualify for this relief, property owners must provide evidence that the property is actively being marketed for rent or sale, such as listing on property websites, signage on the property, or engagement with real estate agents. By actively marketing the property, property owners can demonstrate to the local council that efforts are being made to find a tenant or buyer, which can help in securing an exemption from business rates.
If a property remains empty for an extended period and does not qualify for any exemptions or reliefs, property owners may still be able to reduce their business rates liability by negotiating with the local council. In some cases, property owners may be able to negotiate a reduction in business rates based on the condition of the property, market conditions, or other factors that may impact the property’s value.
Property owners can also consider exploring alternative uses for the empty property to generate income and reduce business rates liability. For example, properties that are suitable for short-term rentals, pop-up shops, or storage facilities can be used to generate income while reducing the financial burden of business rates on an empty property.
In addition, property owners can consider exploring opportunities for temporary or short-term leasing of the property to generate income and avoid business rates liability. By leasing the property on a temporary basis, property owners can generate income while maintaining flexibility in the use of the property, which can help in reducing business rates costs.
Overall, there are several strategies that property owners can explore to avoid business rates on empty property. From qualifying for exemptions and reliefs to actively marketing the property for rent or sale, property owners have options for reducing their business rates liability and saving money. By taking proactive steps and exploring creative solutions, property owners can navigate the challenges of business rates on empty property and protect their financial interests.