Business rates can be a significant financial burden for property owners, especially when they have empty properties that are not generating any income. In the UK, business rates are a tax on non-residential properties that are used for business purposes. However, there are ways to legally avoid paying business rates on empty property. In this article, we will discuss some strategies to help property owners reduce or eliminate business rates on their empty properties.
One of the most common ways to avoid paying business rates on empty property is by applying for an exemption or relief. The government offers various exemptions and reliefs that property owners can take advantage of to reduce their business rates liability. For example, if a property is vacant and undergoing repairs or reconstruction, the owner may be eligible for a 100% exemption for three months (or six months for industrial properties). Owners of newly-built properties can also qualify for a 100% exemption for up to 18 months. It is essential to check with the local council to see if the property meets the criteria for any available exemptions or reliefs.
Another way to avoid business rates on empty property is by actively marketing the property for sale or rent. If the property is actively being marketed, the owner may be eligible for a 50% relief on their business rates for up to six months. This relief is intended to incentivize property owners to actively seek tenants or buyers for their empty properties. Owners should keep detailed records of their marketing efforts, including advertising, listing with agents, and conducting viewings, to demonstrate that the property is genuinely being marketed.
Property owners can also consider demolishing or converting the empty property to avoid paying business rates. If a property is being demolished or converted for a different use, the owner may be eligible for a full or partial exemption from business rates. This exemption is intended to encourage redevelopment and revitalization of vacant properties. However, owners should be aware that they must obtain the necessary planning permissions and follow all relevant regulations before demolishing or converting a property.
In some cases, property owners may choose to temporarily occupy the empty property themselves to avoid paying business rates. If the property is used for short-term storage or other temporary purposes, the owner may be eligible for a partial exemption from business rates. This strategy can be useful for owners who are unable to find tenants or buyers for their empty properties and want to reduce their business rates liability in the meantime. However, owners should be aware that they must comply with all legal requirements and restrictions associated with temporary occupancy.
Property owners can also explore other creative solutions to avoid paying business rates on empty property. For example, they could consider entering into a temporary lease or license agreement with a charity or community group. Charities and community groups are eligible for an 80% relief on business rates, so entering into an agreement with them can help property owners reduce their business rates liability while supporting a good cause. Owners should consult with their local council and seek legal advice to ensure that any agreements comply with relevant regulations and requirements.
Overall, there are several strategies that property owners can use to avoid paying business rates on empty property. By applying for exemptions or reliefs, actively marketing the property, demolishing or converting the property, temporarily occupying the property, or exploring other creative solutions, owners can reduce or eliminate their business rates liability and minimize the financial impact of owning empty properties. It is essential for owners to stay informed about the available options and seek professional advice when necessary to ensure compliance with relevant regulations and maximize their savings on business rates.
In conclusion, avoiding business rates on empty property can be a challenging but achievable goal for property owners. By taking advantage of exemptions, reliefs, and other strategies, owners can reduce their business rates liability and minimize the financial burden of owning empty properties. It is essential for owners to be proactive, stay informed, and seek professional advice to ensure compliance with regulations and maximize their savings. With careful planning and strategic decision-making, property owners can successfully avoid paying business rates on their empty properties and make the most of their real estate investments.