Business rates for vacant property, also known as empty property rates, can be a significant financial burden for property owners These rates are charged on commercial properties that are empty for a certain period of time, and they can add up quickly if the property remains unoccupied In this article, we will explore what business rates for vacant property are, how they are calculated, and what property owners can do to mitigate their impact.
Business rates are a tax levied by local authorities in the UK on non-domestic properties such as shops, offices, and warehouses The rates are used to help fund local services such as schools, roads, and waste disposal If a commercial property is empty, the owner is still required to pay business rates, although there are some exemptions and reliefs available.
When a property becomes vacant, the local council may grant a period of empty property relief, which provides a temporary exemption from paying business rates The length of this relief period varies depending on the type of property and its location In England, for example, most commercial properties are granted a 3-month exemption from business rates, after which they must be paid in full In Scotland and Wales, the relief period is longer, typically 6 months.
Once the empty property relief period expires, the business rates become due, and the property owner is responsible for paying them The rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency in England, the Scottish Assessors in Scotland, and the Valuation Office in Wales The rateable value is an estimate of the property’s rental value, and it is used to calculate the amount of business rates owed.
The business rates for vacant property are charged at the basic non-domestic rate, which is set annually by the government In addition to the basic rate, there may be additional charges such as the small business multiplier for properties with a rateable value below a certain threshold, or the large business supplement for properties with a rateable value above a certain threshold business rates vacant property. These charges can significantly increase the amount of business rates owed on a vacant property.
Property owners facing high business rates on their vacant properties may be eligible for certain exemptions or reliefs to help reduce the financial burden For example, properties with a rateable value of less than £2,900 are eligible for small business rate relief, which provides a discount on the business rates owed Properties that are undergoing major renovations or structural repairs may also qualify for an empty property hardship relief, which can provide a temporary reduction in the rates owed.
In some cases, property owners may be able to apply for a discretionary rate relief, which is granted at the discretion of the local council This relief is typically offered to properties that are considered to have a community or economic benefit, such as historic buildings or properties that support local businesses Property owners must provide evidence of the property’s value to the community in order to qualify for this relief.
Property owners who are struggling to pay their business rates on vacant properties may also consider appealing the rateable value of the property If they believe that the rateable value is incorrect or unfair, they can submit a formal appeal to the Valuation Office Agency or the relevant assessment authority If the appeal is successful, the rateable value may be reduced, thereby lowering the amount of business rates owed.
Overall, business rates for vacant property can be a significant financial burden for property owners, especially if the property remains unoccupied for an extended period of time However, there are several options available to property owners to help reduce the impact of these rates, including exemptions, reliefs, and appeals By understanding how business rates for vacant property are calculated and what options are available, property owners can better manage their financial obligations and make informed decisions about their empty properties.