When a property sits empty, owners may not realize that they are still required to pay business rates on the vacant space. These rates, also known as empty property rates, can often come as an unexpected financial burden to those who thought they were saving money by leaving a property unoccupied. In this article, we will delve into the world of business rates on vacant property, exploring why they exist, how they are calculated, and what property owners can do to minimize their impact.
business rates on vacant property are essentially taxes levied by local authorities on commercial properties that are sitting empty. The rationale behind these rates is to incentivize property owners to put their spaces to use or to sell them, rather than letting them remain vacant for extended periods. By imposing these rates, the government aims to prevent the hoarding of commercial properties and to encourage economic activity and development.
The calculation of business rates on vacant property is based on the rateable value of the property. Rateable value is an estimate of the annual rental value of a property on a certain date, determined by the Valuation Office Agency. This value is then used to calculate the amount of business rates owed on the property. For vacant properties, owners are subject to a full rate, with some exceptions for newly built properties and those with a rateable value below a certain threshold.
business rates on vacant property can vary significantly depending on the location and type of property. In some cases, owners may find themselves facing rates that are almost as high as if the property were occupied. This can pose a significant financial strain, particularly for small businesses or property owners who are struggling to make ends meet.
So, what can property owners do to minimize the impact of business rates on vacant property? One option is to explore whether they are eligible for any exemptions or reliefs. For example, properties that are in the process of being refurbished or are in poor condition may qualify for a 3-month exemption from business rates. Similarly, newly built properties are often eligible for an 18-month exemption. Property owners should also consider whether they are eligible for any charitable or not-for-profit reliefs, which could potentially reduce their rates bill.
Another option for property owners facing high business rates on vacant property is to consider leasing the space on a short-term basis. By renting out the property even temporarily, owners may be able to qualify for an exemption from empty property rates. This can be a particularly beneficial strategy for owners who are planning to refurbish or sell the property in the near future, as it allows them to generate some income while avoiding hefty rates bills.
Some property owners may also be able to take advantage of the government’s scheme to support small businesses during the COVID-19 pandemic, which includes a business rates holiday for certain properties. This temporary relief measure can provide much-needed financial assistance to owners who are struggling to keep their properties afloat during these challenging times.
In conclusion, business rates on vacant property can be a significant financial burden for property owners, particularly those who are already facing financial difficulties. Understanding how these rates are calculated and exploring options for exemptions, reliefs, or temporary leasing can help owners minimize the impact of empty property rates on their finances. By taking proactive steps to address this issue, property owners can better manage their cash flow and ensure that their properties remain viable assets in the long term.