Unoccupied properties can be a headache for business owners and investors alike, especially when it comes to the issue of unoccupied business rates. These rates, also known as empty property rates, are essentially taxes imposed on commercial properties that are not being used or occupied. In this article, we will delve into the intricacies of unoccupied business rates and explore what you need to know as a business owner or property investor.
The first thing to understand about unoccupied business rates is that they are essentially a way for local authorities to generate revenue from properties that are not being used. When a commercial property is empty, it is no longer contributing to the local economy through things like business rates, but it still requires services like waste collection, street cleaning, and policing. To offset the cost of providing these services, local councils impose a tax on unoccupied properties.
The rateable value of a property is used to calculate business rates, and this value is assessed by the Valuation Office Agency (VOA). When a property becomes unoccupied, it is given a temporary rate relief for the first three months. After this period, the property becomes liable for unoccupied business rates, which are set at the same level as the standard business rates.
One important thing to note about unoccupied business rates is that they can significantly impact the financial viability of owning a vacant property. For businesses that are struggling or going through a period of transition, the burden of paying unoccupied business rates on top of other expenses can be overwhelming. This is why it is crucial for property owners to understand the implications of leaving a property unoccupied and to have a plan in place for minimizing the impact of unoccupied business rates.
There are a few ways in which property owners can reduce the amount they have to pay in unoccupied business rates. One option is to make use of exemptions and reliefs that are available for certain types of properties. For example, newly built properties are exempt from unoccupied business rates for the first three months, and listed buildings are given a 100% discount on unoccupied business rates for as long as they remain vacant.
Another way to reduce the burden of unoccupied business rates is to actively market the property for rent or sale. If a property owner can demonstrate that they are actively trying to find a tenant or buyer for the property, they may be able to apply for a temporary exemption from unoccupied business rates. This can buy them some time to find a new occupant for the property without having to pay the full tax rate.
Property owners can also consider taking steps to temporarily occupy the property themselves in order to avoid unoccupied business rates. Even if the property is not being used for its intended purpose, simply having people on the premises can be enough to qualify for a temporary exemption from unoccupied business rates. This could involve using the property for storage, holding events or pop-up shops, or even allowing a charity to use the space temporarily.
Overall, unoccupied business rates can be a significant financial burden for property owners, but there are ways to minimize the impact. By understanding the rules and regulations surrounding unoccupied business rates and taking proactive steps to reduce the amount owed, property owners can navigate this complex issue more effectively. Whether it’s making use of exemptions and reliefs, actively marketing the property, or finding temporary ways to occupy the premises, there are options available for mitigating the financial strain of unoccupied business rates.