When it comes to owning commercial property, one of the biggest financial burdens can be paying business rates on empty buildings. These rates can add up quickly, especially for larger properties, and can become a significant drain on resources for businesses already struggling in challenging economic times. However, there are ways to legally avoid business rates on empty property, saving you money and alleviating some of the financial stress that comes with vacant buildings. In this article, we will explore some of the most effective strategies for avoiding business rates on empty property and keeping your bottom line healthy.
First and foremost, it’s important to understand the rules and regulations surrounding business rates on empty properties. In the United Kingdom, for example, businesses are generally required to pay business rates on properties that are considered to be unoccupied. This includes properties that are empty and being marketed for rent or sale, as well as properties that are undergoing renovation or repair. However, there are exemptions and reliefs available that can help property owners reduce or eliminate their business rates liability.
One of the most common ways to avoid business rates on empty property is to claim an exemption for newly built or redeveloped properties. In the UK, new buildings and properties that have undergone significant redevelopment are eligible for an exemption from business rates for a period of up to 18 months. This can provide property owners with valuable breathing room to market their properties and secure tenants before having to start paying business rates.
Another effective strategy for avoiding business rates on empty property is to claim an exemption for properties that are undergoing major structural repairs. Properties that are empty due to building or renovation works are eligible for a 100% exemption from business rates for a period of up to 12 months. This can be a significant financial relief for property owners who are investing in improving their properties but are not yet generating rental income.
In some cases, property owners may also be able to claim a hardship relief or charitable relief on their business rates for empty properties. Hardship relief is available for businesses that are experiencing financial difficulties and would struggle to pay their business rates on an empty property. Charitable relief, on the other hand, is available for properties that are owned by charities and are used for charitable purposes, such as community centers or shelters.
One important thing to note is that property owners must actively apply for these exemptions and reliefs in order to take advantage of them. Failing to do so can result in unnecessary business rates liabilities and financial strain. It’s crucial to stay informed about the available options and to work with a qualified professional, such as a chartered surveyor or business rates consultant, to ensure that you are maximizing your savings and avoiding unnecessary costs.
In addition to exemptions and reliefs, property owners may also consider alternative strategies for reducing their business rates liability on empty properties. For example, some businesses choose to rent their properties out on a short-term basis to temporary tenants, such as pop-up shops or artists. By doing so, property owners can avoid paying full business rates on their empty properties while still generating some rental income.
Another option to consider is applying for a business rates “holiday” through the government’s COVID-19 relief measures. In response to the economic challenges posed by the pandemic, the government introduced a range of support measures, including a business rates holiday for certain businesses. By taking advantage of this relief, property owners can reduce their business rates liability and free up financial resources to weather the storm.
In conclusion, avoiding business rates on empty property is not only possible but also essential for maintaining a healthy bottom line and safeguarding your financial future. By understanding the rules and regulations surrounding business rates, actively seeking out exemptions and reliefs, and exploring alternative strategies for reducing your liability, you can save money and alleviate the financial burden of owning vacant properties. Remember to stay informed, consult with professionals, and take proactive steps to protect your financial interests.