When it comes to owning commercial property, one of the biggest expenses that many business owners face is business rates. These rates are charged on most non-domestic properties, including shops, offices, warehouses, and factories. However, in some cases, owners of empty commercial properties may be able to avoid paying business rates altogether. In this article, we will discuss some strategies for avoiding business rates on empty property.
One of the most common ways to avoid paying business rates on empty property is by claiming exemptions. In England, for example, empty properties with a rateable value of less than £2,900 are exempt from business rates. This means that if your property falls below this threshold, you will not have to pay any business rates on it. Additionally, certain types of properties, such as agricultural buildings and listed buildings, may also be exempt from business rates.
Another way to avoid paying business rates on empty property is by using the ‘temporary exemption’ rule. This rule allows property owners to claim a temporary exemption from business rates for a limited period of time. In England, for example, empty industrial properties are eligible for a six-month exemption from business rates, while empty offices and shops are eligible for a three-month exemption. By taking advantage of these temporary exemptions, property owners can significantly reduce their business rates liability.
Property owners can also avoid paying business rates on empty property by actively marketing the property for rent or sale. In many cases, local authorities will grant a ‘void relief’ period to property owners who can demonstrate that they are actively trying to find a tenant or buyer for their property. During this void relief period, the property owner may be eligible for a discount on their business rates, or even a complete exemption. By proactively marketing the property, property owners can not only avoid paying business rates but also increase their chances of finding a tenant or buyer sooner.
Alternatively, property owners can consider converting their empty property into a temporary use that is exempt from business rates. For example, in England, properties used for charitable purposes are exempt from business rates. By temporarily converting the property into a charity shop or community center, property owners can avoid paying business rates while also providing a valuable service to the community. Similarly, properties used for storage or industrial purposes may be eligible for exemptions from business rates. By exploring alternative uses for their empty property, property owners can reduce their business rates liability and make better use of their assets.
Finally, property owners can consider demolishing their empty property as a last resort to avoid paying business rates. In some cases, it may be more cost-effective to demolish the empty property than to continue paying business rates on it. Once the property has been demolished, it will no longer be liable for business rates. However, property owners should carefully consider the potential costs and implications of demolition before taking this drastic step.
In conclusion, there are several strategies that property owners can use to avoid paying business rates on empty property. By claiming exemptions, taking advantage of temporary exemptions, actively marketing the property, exploring alternative uses, or considering demolition, property owners can reduce their business rates liability and make the most of their commercial properties. It is important for property owners to carefully consider their options and seek professional advice when necessary to ensure that they are compliant with all applicable regulations and can minimize their business rates costs.