When discussing the complex world of commercial property ownership, one topic that often arises is the issue of business rates. Business rates are the taxes paid on non-residential properties such as offices, shops, warehouses, and factories. These rates are used to fund local services and are based on the rateable value of the property.
One aspect of business rates that can cause confusion for property owners is the exemption for empty properties. This exemption is designed to provide relief for property owners who are unable to find tenants for their vacant properties. In this article, we will explore the business rates empty property exemption in more detail, including who is eligible for the exemption and how to apply for it.
The business rates empty property exemption applies to non-residential properties that are completely empty. This means that the property must be unoccupied and have no goods or furnishings inside. Properties that are partially occupied or used for storage are not eligible for the exemption.
In order to qualify for the exemption, the property must have been empty for a certain period of time. In most cases, this period is three months, but it may vary depending on the local authority. Some local authorities offer longer exemption periods for properties that are being renovated or are in the process of being sold.
It is important to note that the business rates empty property exemption is not automatic. Property owners must apply for the exemption through their local authority. The application process typically involves providing documentation to support the claim that the property is empty, such as photographs or utility bills. Once the application has been approved, the property owner will receive a new rateable value for the property, which will be lower than the standard rateable value.
One common misconception about the business rates empty property exemption is that it is a permanent relief. In reality, the exemption is only temporary, and the property owner will eventually be required to pay full business rates on the property once it is occupied again. The length of the exemption period will vary depending on the local authority, so it is important for property owners to check with their local council to determine how long the exemption will last.
There are also some circumstances in which a property may not be eligible for the business rates empty property exemption. For example, properties that are being used for certain purposes, such as charity shops or community buildings, may not qualify for the exemption. Additionally, properties that are left empty deliberately in order to avoid paying business rates will not be eligible for the exemption.
It is also worth noting that there are certain changes to the rules regarding the exemption that property owners should be aware of. For example, in April 2020, the government introduced new regulations that limit the exemption period for empty properties with a rateable value of over £2,900. Under these new regulations, the exemption period is limited to three months for properties with a rateable value between £2,900 and £12,000 and to six months for properties with a rateable value over £12,000.
Overall, the business rates empty property exemption can provide valuable relief for property owners who are struggling to find tenants for their vacant properties. By understanding the requirements for the exemption and following the application process, property owners can take advantage of this opportunity to reduce their business rates liability. However, it is important to keep in mind that the exemption is only temporary and that property owners will eventually be required to pay full business rates on their properties once they become occupied again.
In conclusion, the business rates empty property exemption is a valuable tool for property owners who are facing challenges with vacant properties. By understanding the eligibility requirements and the application process for the exemption, property owners can take advantage of this relief to help alleviate the financial burden of business rates on their empty properties.