When it comes to owning and managing commercial properties, one of the costs that many businesses have to consider is business rates. These rates are essentially a tax that is levied on non-domestic properties in the UK. However, what happens when a property sits empty? Are owners still required to pay business rates on empty property?
The short answer is yes, owners of empty commercial properties are still required to pay business rates. In fact, empty property rates can be a significant burden for property owners, as they are charged at the same rate as if the property were occupied. This can pose a challenge for businesses that are struggling to find tenants or that are undergoing refurbishment or renovation work.
So why are business rates still charged on empty properties? The rationale behind this policy is to discourage property owners from leaving properties vacant for extended periods of time. By levying rates on empty properties, the government aims to incentivize owners to keep their properties in use or to bring them back into use as quickly as possible.
However, there are some exemptions and relief schemes available for owners of empty properties. For example, properties that are empty for a short period of time may be granted a temporary exemption from business rates. This exemption typically lasts for three months for industrial properties and six months for all other types of properties. After this initial period, owners are required to pay the full rate.
There is also an exemption for newly built properties, which are granted a 100% relief on business rates for the first three months that they are empty. This is designed to encourage the development of new properties and to give owners some time to find tenants before they are hit with business rates bills.
In addition to these exemptions, there are also relief schemes available for certain types of properties. For example, listed buildings are eligible for a 100% relief on business rates, regardless of whether they are occupied or empty. This is intended to support the preservation of historic buildings and to help owners maintain these important structures.
It’s important for property owners to be aware of these exemptions and relief schemes, as they can help to alleviate some of the financial burden of business rates on empty properties. However, it’s also important to be proactive in finding tenants or bringing properties back into use in order to avoid long periods of empty property rates.
There are also ways in which property owners can reduce their business rates bill on empty properties. For example, if a property is undergoing major renovation work, owners can apply for a Section 44a exemption, which provides relief on business rates for up to 12 months. This can be a useful option for owners who are investing in their properties but are not yet generating income from them.
Another option for reducing business rates on empty properties is to apply for charitable or not-for-profit relief. If a property is used for charitable purposes or by a not-for-profit organization, owners may be eligible for relief on their business rates. This can be a valuable option for owners who are using their properties for community or charitable purposes.
Overall, business rates on empty property can be a significant cost for property owners to consider. However, by being aware of the exemptions and relief schemes available, owners can take steps to reduce this financial burden. Whether through temporary exemptions, relief schemes, or other options, there are ways to manage the costs of business rates on empty properties. By staying informed and proactive, property owners can navigate this aspect of property ownership and management successfully.