When it comes to owning commercial property, business rates are a common concern for landlords and property owners These rates are taxes that are levied on non-residential properties, including shops, offices, and warehouses While business rates serve as a valuable source of revenue for local governments, they can also be a significant financial burden for property owners, particularly when the property is vacant In this article, we will delve into the topic of business rates for vacant property, exploring what they are, how they are calculated, and what property owners can do to potentially reduce their liability.
Business rates are a tax that is charged on most non-domestic properties in the UK They are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA) The rateable value represents the rental value of the property as of a specific date and is used to calculate the annual business rates bill The VOA reassesses the rateable value of each property every five years, meaning that the amount of business rates owed can fluctuate over time.
When a non-domestic property becomes vacant, the responsibility for paying business rates falls on the property owner rather than the tenant This can create a financial strain for landlords, particularly if the property remains vacant for an extended period In England, Scotland, and Wales, vacant commercial properties are eligible for a three-month rates holiday, during which no business rates are due After this initial three-month period, however, property owners are required to pay the full amount of business rates unless they qualify for an exemption or relief.
One common way that property owners can reduce their liability for business rates on vacant properties is by applying for empty property relief In England and Wales, properties that have been unoccupied for more than three months are eligible for a 100% discount on business rates for the first three months, followed by a 50% discount thereafter business rates vacant property. In Scotland, properties are eligible for a 10% discount on business rates after being vacant for three months, with the discount increasing to 50% after 12 months.
Another potential option for property owners looking to reduce their business rates liability on vacant properties is to apply for charitable relief In some cases, properties that are held by charities and used for charitable purposes may be eligible for full exemption from business rates Property owners should consult with their local council to determine their eligibility for this relief and to submit the necessary documentation to support their application.
In addition to empty property relief and charitable relief, there are other avenues that property owners can explore to potentially reduce their business rates liability on vacant properties For example, properties that are undergoing significant structural repairs or renovations may be eligible for a temporary exemption from business rates Property owners should provide evidence of the ongoing works and the projected timeline for completion to their local council in order to secure this exemption.
It is important for property owners to be proactive in managing their business rates liability on vacant properties Failing to pay business rates on a vacant property can result in penalties and legal action by the local council By taking advantage of available relief schemes and exemptions, property owners can minimize their financial burden and ensure compliance with the law.
In conclusion, business rates for vacant property can be a significant concern for landlords and property owners Understanding how business rates are calculated, as well as the relief options available, can help property owners navigate this complex issue and potentially reduce their liability By staying informed and proactive, property owners can effectively manage their business rates liability on vacant properties and avoid costly penalties.