Empty properties can be a source of frustration for both property owners and local authorities alike. Not only do vacant buildings often attract vandalism and squatting, but they can also be a drain on the local economy. In an effort to combat this issue, the government implemented business rates on empty property to incentivize property owners to make productive use of their land. In this article, we will explore the ins and outs of business rates on empty property, including how they are calculated and what exemptions may apply.
Business rates, also known as non-domestic rates, are taxes levied on most non-residential properties in the UK. This includes commercial properties such as shops, offices, and warehouses, as well as certain types of agricultural land and other non-domestic buildings. In the case of empty properties, the responsibility for paying the business rates falls on the property owner.
The business rates on empty property are calculated based on the rateable value of the building, which is determined by the Valuation Office Agency (VOA). The rateable value is an estimate of the yearly rental value of the property if it were to be rented out on the open market. The amount of business rates due on an empty property is usually set at 50% of the standard rate, although there are exceptions to this rule.
It is important to note that business rates on empty property are not a fixed amount and can vary depending on a number of factors. In some cases, property owners may be eligible for relief or exemptions from paying the full amount of business rates on their vacant building. For example, properties that have been empty for less than three months are usually exempt from paying any business rates at all. Additionally, certain types of properties, such as listed buildings and those with a rateable value of less than £2,900, may be eligible for further discounts or exemptions.
One of the most common ways property owners can reduce their business rates liability on an empty property is by claiming what is known as the “Empty Property Rate Relief.” This relief allows property owners to claim a 100% exemption from paying business rates on their vacant building for a limited period of time. The length of time for which this relief is available can vary depending on the local authority, but it is typically around three or six months.
To claim Empty Property Rate Relief, property owners must inform their local council of the vacancy and provide evidence that the building is not in use. This can include photographs of the empty property, correspondence with potential tenants or contractors, or any other relevant documentation. Once the council has confirmed the property’s eligibility for relief, the business rates liability will be reduced or eliminated for the specified period.
Property owners should be aware that there are certain limitations to claiming Empty Property Rate Relief. For example, if a property was previously occupied but has become vacant, the relief period may be shorter or subject to additional conditions. Additionally, any changes to the property, such as repairs or renovations, may trigger a reassessment of the business rates liability.
In some cases, property owners may also be eligible for other types of relief or exemptions from paying business rates on their empty property. For example, if a building is undergoing major structural work or is in a designated enterprise zone, the property owner may be entitled to a reduction or exemption from business rates. Additionally, properties that are used for certain charitable purposes or are classified as agricultural land may also be eligible for relief.
Overall, navigating the business rates on empty property can be a complex and confusing process. Property owners must be diligent in keeping track of their obligations and exploring all possible avenues for relief or exemptions. By understanding the rules and regulations surrounding business rates on empty property, owners can minimize their financial burden and make more informed decisions about the management of their vacant buildings.