When it comes to owning commercial property, one of the major expenses that can eat into your profits is business rates. These rates are a tax on non-domestic properties, including shops, offices, warehouses, and other types of commercial buildings. However, there are ways that landlords and property owners can legally avoid paying business rates on empty property. In this article, we will discuss some strategies that can help you reduce or eliminate this financial burden.
Before we delve into the methods for avoiding business rates on empty property, it’s important to understand the current regulations regarding this issue. In the past, property owners were allowed a “rate holiday” for three months after their property became vacant. However, this rule has changed, and now, business rates are due on any empty property after a 3-month period. This change has made it more challenging for property owners to avoid paying rates on their vacant buildings.
One way to avoid business rates on empty property is by applying for an exemption. Certain types of properties may be exempt from business rates, such as buildings used for agricultural purposes, public toilets, and buildings with a rateable value below a certain threshold. If your property falls into one of these categories, you may be able to apply for an exemption and avoid paying business rates.
Another option for avoiding business rates on empty property is by implementing a property guardianship scheme. This involves placing live-in guardians in your vacant building to secure and maintain it. By doing so, the property is considered to be occupied, and you may be able to claim a 100% exemption on business rates. This can be a cost-effective solution for property owners who want to avoid paying rates on their empty buildings.
Renting out your property on a short-term basis can also help you avoid business rates on empty property. By leasing your building to a temporary tenant, even for a short period of time, the property is considered to be occupied, and you may qualify for relief on your business rates. This can be a viable option for property owners who are looking to generate some income from their empty buildings while avoiding the financial burden of paying rates.
In some cases, property owners may choose to demolish their vacant building to avoid paying business rates. By demolishing the property, you can apply for a demolition relief, which provides a 100% exemption on rates for the remaining period until the property is redeveloped. While this may be a drastic measure, it can be a viable option for property owners who have no immediate plans to redevelop their empty buildings.
Alternatively, property owners can consider applying for a hardship relief to reduce their business rates on empty property. If you can demonstrate that paying the full rates would cause you financial hardship, you may be eligible for a reduction in the amount you owe. This relief is granted on a case-by-case basis, so it’s essential to provide evidence of your financial situation to support your application.
Lastly, property owners can seek professional advice to explore other options for avoiding business rates on empty property. Consulting with a commercial property advisor or tax specialist can help you identify potential loopholes or exemptions that you may qualify for. These experts can provide tailored solutions based on your specific circumstances and help you navigate the complex regulations surrounding business rates.
In conclusion, business rates on empty property can be a significant financial burden for landlords and property owners. However, there are various strategies that can help you reduce or eliminate this expense. Whether it’s applying for an exemption, implementing a property guardianship scheme, renting out your property on a short-term basis, demolishing the building, applying for hardship relief, or seeking professional advice, there are ways to avoid paying business rates on empty property. By exploring these options and finding the best solution for your situation, you can minimize the impact of business rates on your bottom line.