Real estate can be a lucrative investment for many business owners. However, when properties sit empty, business rates can quickly become a financial burden. Business rates are a tax levied by the government on most non-domestic properties, including commercial premises. The rates are calculated based on the rateable value of the property and can vary depending on location and property type.
avoiding business rates on empty property is a top priority for many property owners. Fortunately, there are several legal strategies that can help minimize or eliminate this cost. In this article, we will explore some of the most effective ways to legally avoid business rates on empty property.
One common strategy for avoiding business rates on empty property is to actively market the property for rent or sale. By demonstrating that you are actively trying to find a tenant or buyer for the property, you can qualify for an exemption from business rates. This exemption, known as the empty property rate relief, can provide relief from business rates for a period of three months for commercial properties and six months for industrial properties.
To qualify for empty property rate relief, property owners must demonstrate that they are actively marketing the property for rent or sale. This can include advertising the property online, working with real estate agents, or attending property fairs and networking events. Property owners should keep detailed records of their marketing efforts to provide evidence to the local council if requested.
Another way to avoid business rates on empty property is to temporarily occupy the space with a pop-up shop or temporary use. By leasing the property to a temporary tenant for a short period, property owners can qualify for relief from business rates. This strategy can help generate income from the property while avoiding the full burden of business rates.
Property owners should be aware that there are strict rules governing temporary occupations for the purpose of avoiding business rates. The temporary use must be genuine and not simply a ploy to avoid paying rates. Property owners should enter into a formal lease agreement with the temporary tenant and ensure that the occupation is legitimate and compliant with local regulations.
In some cases, property owners may consider demolishing the property to avoid business rates. Properties that are undergoing redevelopment or substantial reconstruction may qualify for an exemption from business rates. This can be a costly and time-consuming process, but in some cases, it may be the most effective way to avoid business rates on an empty property.
Property owners should be aware that there are strict rules governing demolition or reconstruction for the purpose of avoiding business rates. The property must be genuinely undergoing redevelopment, and property owners must provide evidence of their plans to the local council. Property owners should consult with a legal advisor or property consultant to ensure that they are complying with all relevant regulations and requirements.
Finally, property owners can consider appealing the rateable value of the property to reduce their business rates liability. The rateable value is determined by the Valuation Office Agency (VOA) and is used to calculate business rates. If property owners believe that the rateable value is inaccurate or unfair, they can submit an appeal to have it reassessed.
Property owners should gather evidence to support their appeal, such as rental values of similar properties in the area or any physical defects or limitations of the property. Property owners should also be prepared to attend a hearing to present their case to the VOA. While appealing the rateable value can be a lengthy process, it can result in significant savings on business rates in the long run.
In conclusion, avoiding business rates on empty property is a top priority for many property owners. By actively marketing the property, temporarily occupying the space, considering demolition or reconstruction, or appealing the rateable value, property owners can legally minimize or eliminate their business rates liability. Property owners should consult with a legal advisor or property consultant to explore the best strategies for their specific situation and ensure compliance with all relevant regulations.