Business rates are charges imposed by local authorities on the owners or occupiers of non-domestic properties, such as shops, offices, warehouses, and factories. The amount payable is typically calculated based on the rateable value of the property and is used to fund local services provided by the council. However, what happens when a property is left unoccupied? This is where unoccupied business rates come into play.
unoccupied business rates, also known as empty property rates, are charges that property owners must pay on properties that are empty and not being used for business purposes. These rates were introduced to encourage property owners to bring their empty properties back into use and discourage property speculation or hoarding.
The rules regarding unoccupied business rates can vary depending on where the property is located. In England, for example, the government imposes a 100% rate on most empty commercial properties, meaning that owners must pay the full amount of business rates even if the property is unoccupied. This applies for the first three months for non-industrial properties and the first six months for industrial properties.
After the initial period, the rateable value of the property is doubled, meaning that owners must pay 200% of the standard business rates. This is intended to incentivize property owners to find tenants or buyers for their empty properties quickly. Some properties may be exempt from unoccupied business rates, such as those with a rateable value below a certain threshold or those owned by charities or community amateur sports clubs.
In Wales, the rules surrounding unoccupied business rates are similar to those in England, with a 100% rate for the first three or six months and a 100% increase thereafter. However, in Scotland, there is a 10% rate for unoccupied commercial properties, with some exemptions for specific types of properties.
It is important for businesses to be aware of the implications of unoccupied business rates, as failing to pay them can result in penalties and legal action. Property owners should take steps to minimize their liability for unoccupied business rates, such as negotiating short-term leases or licenses to occupy the property during periods of vacancy.
There are also ways in which businesses can challenge the rateable value of their property, which can in turn reduce the amount of unoccupied business rates payable. This can be done by submitting an appeal to the Valuation Office Agency, providing evidence to support a lower rateable value based on factors such as the condition of the property, local rental values, or economic circumstances.
Property owners may also be eligible for certain reliefs or exemptions from unoccupied business rates. For example, newly built properties are exempt from unoccupied business rates for the first three months, while listed buildings may be eligible for a 100% exemption. It is worth exploring these options to see if there are opportunities to reduce the financial burden of unoccupied business rates.
In some cases, property owners may decide to demolish or refurbish their empty properties in order to avoid paying unoccupied business rates. By taking action to bring the property back into use, owners can not only avoid financial penalties but also contribute to the local economy and community.
Overall, unoccupied business rates can be a significant expense for property owners, especially during times of economic uncertainty or property market downturns. It is important for businesses to stay informed about the rules and regulations surrounding unoccupied business rates in their area, and to take proactive steps to minimize their liability and maximize their chances of finding a suitable tenant or buyer for their empty properties.