When it comes to commercial property, business rates are a common concern for many owners and tenants. The amount of business rates that a property owner or tenant must pay is determined by the rateable value of the property, as well as any applicable reliefs or exemptions. However, what happens when a property is vacant or empty? This is where void business rates come in.
void business rates refer to the business rates that must be paid on commercial properties that are unoccupied or empty. These rates are often a source of frustration for property owners and tenants, as they are required to pay rates on properties that are not generating any income. In this article, we will explore what void business rates are, how they are calculated, and what steps can be taken to minimize or avoid paying them.
Void business rates are a form of local taxation that is charged on commercial properties that are empty or unoccupied. The purpose of void business rates is to discourage property owners from leaving their properties vacant for extended periods of time, as empty properties can have a negative impact on local communities and economies. By charging void business rates, local authorities aim to incentivize property owners to occupy their properties or put them to productive use.
The calculation of void business rates is based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). The rateable value is then multiplied by the appropriate multiplier set by the government to calculate the annual business rates bill. However, when a property becomes vacant, the owner or tenant may be eligible for a period of relief from paying business rates.
In England, for example, properties that have been empty for three months or more may be eligible for a 100% relief on business rates for the first three months. After the initial three-month period, the property owner may be required to pay the full business rates bill unless they qualify for additional reliefs or exemptions. It is important to note that each local authority has its own rules and regulations regarding void business rates, so property owners should consult with their local council for specific guidance.
Property owners and tenants can take several steps to minimize or avoid paying void business rates. One common strategy is to actively market the property for rent or sale in order to attract potential tenants or buyers. By demonstrating that efforts are being made to occupy the property, property owners may be able to qualify for additional relief or exemptions from paying void business rates.
Alternatively, property owners can consider using the property for short-term purposes, such as hosting events or pop-up shops, in order to generate some income and avoid paying void business rates. This temporary use of the property can also help to attract potential long-term tenants or buyers, thus reducing the likelihood of the property remaining empty for an extended period of time.
In some cases, property owners may be able to apply for an exemption from paying void business rates if the property is undergoing major refurbishment or structural repairs. This exemption is known as a Section 44a relief and can provide property owners with much-needed financial relief during the renovation process. However, it is important to note that not all properties will qualify for this exemption, so property owners should consult with their local council for specific guidance.
Overall, void business rates are a common concern for property owners and tenants of commercial properties that are vacant or empty. By understanding how void business rates are calculated and what steps can be taken to minimize or avoid paying them, property owners can effectively manage their financial obligations and ensure that their properties are put to productive use.