When it comes to owning and operating commercial properties, there are many costs that property owners must consider One significant cost that often comes as a surprise to new property owners is business rates on vacant property Business rates are a tax on non-residential properties in the UK, and they can be a substantial financial burden for property owners, especially when the property is vacant In this article, we will discuss what business rates on vacant property are, how they are calculated, and what steps property owners can take to minimize their impact.
Business rates on vacant property, often referred to simply as empty property rates, are a tax that property owners must pay on non-residential properties that are empty and not being used The idea behind this tax is to encourage property owners to bring empty properties back into use, thus helping to stimulate economic growth and prevent properties from sitting empty for extended periods.
Calculating business rates on vacant property can be a complex process, and it is based on the rateable value of the property The rateable value is determined by the Valuation Office Agency (VOA) and is used to calculate how much the property owner must pay in business rates The rateable value is typically based on the rental value of the property as of a certain date, and it is re-assessed every five years.
Once the rateable value is determined, the property owner must pay business rates on the property, even if it is vacant However, there are some exceptions and reliefs that property owners can apply for to help alleviate the financial burden of empty property rates For example, if a property is newly built or undergoing major repairs, the property owner may be eligible for a relief that reduces the amount of business rates they must pay Additionally, there are certain types of property, such as agricultural land, that are exempt from business rates altogether.
Despite these exceptions and reliefs, business rates on vacant property can still be a significant financial burden for property owners business rates vacant property. This is especially true for properties that have been vacant for an extended period, as the business rates can quickly add up In some cases, property owners may find themselves struggling to pay the business rates on vacant property, which can lead to financial hardship and even the loss of the property.
To avoid falling into financial difficulties due to business rates on vacant property, property owners should take steps to minimize the impact of empty property rates One option is to actively market the property for rent or sale, as bringing the property back into use can help to reduce the amount of business rates that must be paid Property owners should also keep detailed records of any efforts to market the property, as this information may be used to support an appeal for relief from business rates.
Another option for property owners is to consider leasing the property to a charity or community group Properties that are occupied by a charity or community group are eligible for an 80% discount on business rates, which can help to significantly reduce the financial burden of empty property rates This can be a win-win situation for both the property owner and the charity or community group, as the property owner can benefit from reduced business rates while the charity or community group gains access to much-needed space.
In conclusion, business rates on vacant property can be a significant financial burden for property owners, but there are steps that can be taken to minimize their impact By understanding how business rates on vacant property are calculated, exploring available exemptions and reliefs, and actively marketing the property, property owners can reduce the financial burden of empty property rates and avoid falling into financial difficulties With careful planning and proactive management, property owners can navigate the complexities of business rates on vacant property and ensure that their properties remain profitable investments.