Business rates can be a significant cost for property owners, especially when their property sits empty. However, there are ways to avoid paying business rates on empty property legally. By understanding the rules and taking proactive steps, property owners can minimize their financial burden. In this article, we will discuss various strategies for avoiding business rates on empty property.
When a property becomes empty, the owner may be faced with the prospect of paying full business rates on the premises. However, there are certain exemptions and reliefs available that can help property owners reduce or eliminate this cost. It is important to be aware of these options and take the necessary steps to qualify for them.
One common way to avoid paying business rates on empty property is to claim empty property relief. This relief grants a temporary exemption from business rates for certain types of empty properties. In England, for example, properties with a rateable value of less than £2,900 are completely exempt from business rates while empty. Properties with a rateable value between £2,900 and £12,000 are entitled to a 100% relief for three months, followed by a 50% relief for the next three months. This relief can be a significant money saver for property owners, especially when their property is likely to remain unoccupied for an extended period.
Another way to avoid paying business rates on empty property is through the use of short-term occupation agreements. By allowing another party to occupy the property temporarily, the owner may be able to claim relief from business rates. This could be a viable option for owners who are actively seeking a long-term tenant but want to avoid paying full rates in the meantime. However, it is important to ensure that the occupation agreement is legitimate and that the occupier does not have any intention to establish a long-term presence on the property.
Property owners may also consider demolishing or refurbishing their empty property to avoid paying business rates. In some cases, properties undergoing significant renovation or redevelopment are eligible for business rates relief. By investing in the property and making improvements, owners can potentially qualify for relief or reduced rates during the construction phase. This can be a strategic move for owners who are looking to enhance the value of their property while avoiding unnecessary costs.
Additionally, property owners should be aware of the rules surrounding small business rate relief. This relief is available to businesses with only one property with a rateable value of less than £15,000. If the property is unoccupied, the owner may still be eligible for small business rate relief as long as they meet certain criteria. By applying for this relief, property owners can reduce their business rates significantly.
It is important for property owners to stay informed about changes in business rates legislation and take advantage of any available reliefs or exemptions. By staying proactive and exploring different options, owners can minimize their financial burden and make the most of their property investment. Seeking advice from a qualified professional, such as a tax advisor or property consultant, can also help property owners navigate the complexities of business rates and make informed decisions.
In conclusion, avoiding business rates on empty property is possible with careful planning and a thorough understanding of the rules. By utilizing exemptions, reliefs, occupation agreements, and renovation strategies, property owners can reduce or eliminate their business rates liability while their property remains unoccupied. It is crucial for owners to stay updated on changes in legislation and seek professional guidance when needed. With the right approach, property owners can protect their finances and maximize the value of their investment.