Business rates can be a significant cost for property owners, especially when a property sits empty. In the UK, owners of commercial properties are required to pay business rates on empty properties unless they qualify for an exemption or relief. This can pose a financial burden on owners who are struggling to find tenants or are in the process of refurbishing a property for future use.
However, there are a number of strategies that property owners can employ to minimize or avoid paying business rates on empty property. By being aware of these strategies and taking proactive steps, owners can save money and reduce financial strain. In this article, we will discuss some of the most effective ways to avoid business rates on empty property.
1. Understand the Empty Property Rate Relief
One of the first things property owners should do is understand the Empty Property Rate Relief that is available to them. In England, for example, most empty non-domestic properties are subject to business rates for the first three months they are empty. After this initial period, they are eligible for a 100% relief for a further three months. This relief can be extended for certain properties, such as those owned by charities or community amateur sports clubs.
Property owners should check with their local council to see if they qualify for Empty Property Rate Relief and ensure that they are taking advantage of this benefit. By understanding the relief available to them, owners can avoid unnecessary payments on empty properties.
2. Consider Property Guardianship
Property guardianship is a popular strategy for minimizing business rates on empty property. By allowing property guardians to live in the empty property, owners can qualify for a 100% exemption from business rates. Property guardians are individuals or companies that live in empty properties in exchange for a lower rent. This not only helps property owners save money on business rates but also provides security for the property and deters vandalism and squatting.
While property guardianship may not be suitable for all types of properties, it can be an effective solution for owners who are struggling to find tenants or are planning to refurbish a property in the future. By considering property guardianship, owners can reduce their financial burden while also protecting their property.
3. Explore Temporary Use
Another strategy for avoiding business rates on empty property is to explore temporary uses for the property. By temporarily renting out the property for events, pop-up shops, or temporary office space, owners can qualify for a 100% exemption from business rates. This can be a great way to generate income from an empty property while also avoiding unnecessary payments.
Owners should consider partnering with event organizers, local businesses, or community groups to find temporary uses for their property. By being creative and flexible, owners can take advantage of this exemption and generate income from their empty property.
4. Apply for Hardship Relief
In some cases, property owners may be experiencing financial hardship and struggling to pay business rates on empty property. In these situations, owners can apply for hardship relief from their local council. Hardship relief is a discretionary relief that is granted in cases of exceptional hardship where the ratepayer is unable to pay the business rates.
Owners should provide evidence of their financial situation and demonstrate why they are unable to pay the business rates. While hardship relief is not guaranteed, it can provide temporary relief for owners who are facing financial difficulties.
5. Stay Informed and Seek Professional Advice
Finally, property owners should stay informed about changes to business rates regulations and seek professional advice when needed. Business rates regulations can be complex and vary depending on the location and type of property. By staying informed and seeking advice from tax professionals or property experts, owners can ensure that they are taking advantage of all available exemptions and relief options.
In conclusion, avoiding business rates on empty property can be a challenging task for property owners. However, by understanding the available relief options, considering strategies such as property guardianship and temporary use, applying for hardship relief when needed, and staying informed, owners can minimize their financial burden and avoid unnecessary payments. By taking proactive steps and utilizing these strategies, property owners can save money and protect their investment in empty property.