When it comes to owning commercial property, one of the costs that can quickly eat into profits is business rates These rates are taxes that property owners must pay to the local government based on the rateable value of the property In some cases, empty properties are also subject to business rates, which can be particularly burdensome for property owners who are struggling to find tenants or trying to sell the property In this article, we will discuss some tips on how to avoid paying business rates on empty property.
1 Temporary exemption
One of the most effective ways to avoid paying business rates on empty property is to take advantage of the temporary exemption provided by the government This exemption allows property owners to avoid paying rates for a certain period of time, typically three or six months, depending on the location of the property To qualify for this exemption, property owners must prove that they are actively trying to let or sell the property This can be done by providing evidence such as marketing materials, correspondence with potential tenants or buyers, and records of viewings.
2 Use the property for charitable purposes
Another way to avoid paying business rates on empty property is to use the property for charitable purposes Properties that are being used for charitable activities are exempt from business rates, regardless of whether they are occupied or empty This can be a great option for property owners who are struggling to find tenants or buyers and want to avoid paying rates on an empty property By allowing a charity to use the property rent-free, property owners can not only avoid business rates but also contribute to a good cause.
3 Apply for small business rate relief
If you own a property that is classified as a small business property, you may be eligible for small business rate relief avoiding business rates on empty property. This relief can significantly reduce the amount of business rates that you have to pay, making it a great option for property owners who are struggling to cover the costs of an empty property To qualify for small business rate relief, the rateable value of the property must be below a certain threshold, typically £12,000 Property owners can apply for this relief directly to the local council, who will assess whether they meet the eligibility criteria.
4 Explore other exemptions and reliefs
In addition to temporary exemption, charitable use, and small business rate relief, there are other exemptions and reliefs available that can help property owners avoid paying business rates on empty property For example, properties that are listed buildings or are undergoing major structural repairs may be eligible for relief from business rates Property owners should explore all possible options and speak to their local council to determine what exemptions and reliefs they may be eligible for.
5 Consider short-term leases or licences
If you are struggling to find a long-term tenant for your empty property, consider offering short-term leases or licences instead By allowing a tenant to occupy the property temporarily, you can avoid paying business rates on an empty property and generate some income in the meantime Short-term leases or licences can be beneficial for both parties, as they provide flexibility and allow property owners to earn some rental income while they continue to search for a long-term tenant.
In conclusion, there are several ways to avoid paying business rates on empty property, from temporary exemption and charitable use to small business rate relief and short-term leases Property owners should carefully consider their options and explore all possible exemptions and reliefs to reduce the financial burden of business rates on empty property By taking proactive steps and seeking professional advice, property owners can minimize costs and maximize returns on their commercial properties.