When it comes to owning property for business purposes, one of the key concerns that many owners have is managing the costs associated with owning and maintaining that property. Business rates, also known as non-domestic rates, are one of the expenses that property owners must factor into their budgets. These rates are taxes imposed by local authorities on most non-residential properties, including shops, offices, factories, and warehouses. While business rates are a necessary part of property ownership, there are strategies that property owners can employ to avoid or reduce the rates on empty properties.
One of the most common ways that property owners can avoid paying business rates on empty property is by taking advantage of exemptions and reliefs. In the UK, for example, there are several types of relief available for empty properties. Small business rate relief, for example, can provide a discount on business rates for properties with a rateable value below a certain threshold. Another option is charitable rate relief, which provides relief for properties that are occupied by charities. Additionally, properties that are undergoing major repair or structural alteration may be eligible for empty property relief, which can provide relief for a limited period of time.
Another strategy for avoiding business rates on empty property is to actively market the property for rent or sale. In some cases, local authorities may offer a relief known as “empty property rate relief” for properties that are actively being marketed for rental or sale. To qualify for this relief, property owners must provide evidence that the property is being actively marketed, such as listing the property with a commercial real estate agent or advertising the property online. By actively marketing the property, property owners can demonstrate that they are making efforts to generate income from the property, which may entitle them to relief on business rates.
Property owners can also consider negotiating a temporary lease or license for the property. By entering into a short-term lease or license agreement, property owners can demonstrate that the property is occupied and therefore not subject to business rates. While this may involve some administrative burden, it can be a viable option for property owners who are looking to avoid business rates on empty property. It is important to note that property owners should seek legal advice before entering into any lease or license agreement to ensure that the terms are favorable and comply with all relevant regulations.
Additionally, property owners can consider alternative uses for the property to avoid paying business rates. For example, properties that are used for agricultural purposes may qualify for agricultural relief on business rates. This relief can provide a significant discount on business rates for properties that are used for farming or other agricultural activities. Similarly, properties that are used for storage purposes may qualify for storage relief, which can provide relief on business rates for properties that are used primarily for storage. By exploring alternative uses for the property, property owners may be able to reduce or eliminate the business rates on empty property.
Finally, property owners can consider appealing the rateable value of the property to reduce the amount of business rates owed. In the UK, property owners can appeal the rateable value of their property to the Valuation Office Agency (VOA) if they believe it is incorrect. By providing evidence such as rental comparables or information on market conditions, property owners may be able to secure a reduction in the rateable value of the property, which can lead to a reduction in the amount of business rates owed. It is important to note that property owners should seek advice from a professional, such as a chartered surveyor, before appealing the rateable value of their property to ensure they have a strong case.
In conclusion, there are several strategies that property owners can employ to avoid or reduce business rates on empty property. By taking advantage of exemptions and reliefs, actively marketing the property, negotiating temporary leases or licenses, exploring alternative uses, and appealing the rateable value, property owners can mitigate the costs associated with owning and maintaining empty property. By carefully planning and implementing these strategies, property owners can optimize their property portfolios and minimize their financial burden.