When it comes to owning or managing commercial property, one of the costs that can significantly impact the bottom line is business rates. Business rates are a tax on non-residential properties that are paid by the owner or occupier of the property. However, there are strategies that can be implemented to avoid or reduce these rates, particularly when dealing with empty properties. In this article, we will discuss some of the ways that property owners can minimize their business rates liability on empty properties.
One of the most common ways to avoid business rates on empty property is to qualify for a rate relief or exemption. There are several types of relief available, such as the Small Business Rate Relief, which provides a discount on business rates for properties with a rateable value below a certain threshold. Additionally, properties that are used for charitable purposes or are listed buildings may also be eligible for relief. Property owners should research the different types of relief available to see if their property qualifies for any of them.
Another strategy for avoiding business rates on empty property is to actively market the property for rent or sale. If a property is actively being marketed, the owner may be able to claim an exemption from business rates for a certain period of time. This period is typically 3 months for industrial properties and 6 months for other types of commercial properties. By demonstrating that the property is actively being marketed, property owners can take advantage of this exemption and reduce their business rates liability.
Property owners can also consider temporarily leasing the property to a charity or community group. Properties that are used for charitable purposes may be eligible for relief on business rates. By leasing the property to a charity or community group, property owners can reduce or eliminate their business rates liability while also benefiting the community. This strategy not only helps property owners save money on business rates but also allows them to contribute to a good cause.
Property owners may also consider demolishing the property if it is no longer viable or cost-effective to maintain. Properties that are undergoing redevelopment or are in the process of being demolished may be eligible for relief on business rates. By demolishing the property, property owners can avoid paying business rates on an empty property while creating space for new development. However, property owners should be aware of the regulations and requirements for demolition in their area before proceeding with this strategy.
Lastly, property owners can explore the option of appealing their business rates assessment. If a property owner believes that their business rates assessment is inaccurate or unfair, they have the right to appeal to the Valuation Office Agency (VOA). The VOA will review the assessment and make a determination based on the property’s rateable value and other relevant factors. If the appeal is successful, the property owner may be able to reduce their business rates liability and save money on their tax bill.
In conclusion, there are several strategies that property owners can implement to avoid or reduce business rates on empty property. By qualifying for rate relief, actively marketing the property, leasing it to a charity or community group, demolishing the property, or appealing the assessment, property owners can minimize their business rates liability and save money. It is important for property owners to research the options available to them and choose the strategy that best fits their particular situation. By taking proactive steps to mitigate their business rates liability, property owners can ensure that their investment remains profitable in the long run.