When it comes to owning and managing commercial property, one of the biggest expenses that property owners face is business rates. These rates are taxes that are charged on most non-domestic properties, including shops, offices, warehouses, and factories. However, there are ways that property owners can avoid paying business rates on empty properties. In this article, we will discuss five strategies that can help property owners save money on business rates for their empty properties.
1. Small Business Rates Relief
One way to avoid paying business rates on empty property is to take advantage of small business rates relief. This is a government scheme that allows businesses with a rateable value below a certain threshold to qualify for a discount on their business rates. If your empty property falls below this threshold, you may be eligible for this relief.
To qualify for small business rates relief, the rateable value of your property must be below £15,000 in England, £12,000 in Wales, and £18,000 in London. If your property meets these criteria, you could receive up to 100% relief on your business rates for a specified time period. This can be a great way to save money on business rates for your empty property while you search for a new tenant.
2. Temporary Use
Another strategy for avoiding business rates on empty property is to temporarily use the space for a different purpose. By temporarily using the property for a different purpose, such as hosting events, exhibitions, or pop-up shops, you may be able to qualify for an exemption from business rates. This exemption is known as the temporary use exemption and allows property owners to avoid paying business rates for up to six months.
To qualify for the temporary use exemption, the property must be used for a qualifying purpose and the intended use must be clearly stated to the local council. By taking advantage of this exemption, property owners can save money on business rates while they explore temporary uses for their empty property.
3. Vacant Property Relief
Vacant property relief is another way that property owners can avoid paying business rates on empty property. This relief is available to property owners who have empty properties for a specified time period. In England, this relief is available for the first three months that a property is empty, and in Wales, the relief is available for the first six months.
To qualify for vacant property relief, property owners must notify the local council that the property is vacant and provide evidence of this vacancy. By applying for vacant property relief, property owners can save money on business rates for the initial period that their property is empty.
4. Property Development
Property owners can also avoid paying business rates on empty property by developing the property. By making improvements to the property or changing its use, property owners can potentially qualify for an exemption from business rates. This exemption is known as the property development exemption and allows property owners to avoid paying business rates while the property is under development.
To qualify for the property development exemption, property owners must demonstrate that the property is undergoing substantial changes that will affect its rateable value. By taking advantage of this exemption, property owners can save money on business rates while they enhance the value of their empty property.
5. Charitable Relief
Lastly, property owners can avoid paying business rates on empty property by granting the property to a charitable organization. By gifting the property to a registered charity, property owners can qualify for charitable relief and avoid paying business rates on the property.
To qualify for charitable relief, the property must be used for charitable purposes and be occupied by a registered charity. By transferring ownership of the property to a charity, property owners can save money on business rates while supporting a charitable cause.
In conclusion, there are several strategies that property owners can use to avoid paying business rates on empty property. By taking advantage of small business rates relief, temporary use, vacant property relief, property development, and charitable relief, property owners can save money on business rates for their empty properties. Implementing these strategies can help property owners minimize expenses and maximize profits on their commercial properties.