Empty properties can become a burden for property owners, especially when they are subjected to business rates despite not generating any income. Business rates are taxes that property owners must pay to the local council based on the rateable value of their property. When a property is vacant, the burden of paying these rates can be particularly challenging. However, there are ways in which property owners can legally avoid or reduce business rates on empty property. In this article, we will explore some of these strategies that property owners can use to minimize the impact of business rates on their vacant properties.
One of the first and most common strategies for avoiding business rates on empty property is to apply for empty property relief. This relief allows property owners to claim a temporary exemption from paying business rates on their vacant properties. The length of this exemption period varies depending on the location of the property, but it typically ranges from three to six months. Property owners must apply for empty property relief through their local council, providing evidence of the property’s vacancy and the date when it became empty.
It is important for property owners to keep in mind that empty property relief is not automatic, and they must apply for it as soon as the property becomes vacant to avoid unnecessary charges. Property owners should also be aware that local councils may have specific criteria that must be met to qualify for empty property relief, such as maintaining the property in a secure and safe condition during the vacant period. Failure to comply with these criteria may result in the denial of the relief and the imposition of business rates on the property.
Another strategy that property owners can use to avoid business rates on empty property is to consider temporary occupation. This involves allowing a third party to occupy the property temporarily, even if it is vacant, to trigger an exemption from business rates. This temporary occupation can take various forms, such as hosting events, short-term rentals, or allowing a charity to use the space for a limited period. Property owners must ensure that the temporary occupation is legitimate and not just a scheme to avoid paying business rates, as local councils may investigate such arrangements to prevent abuse of the system.
Property owners can also consider applying for charitable relief if their empty property is used for charitable purposes. Charitable relief provides a 80% discount on business rates for properties that are used for charitable activities, such as community centers, hospitals, or religious buildings. To qualify for charitable relief, property owners must provide evidence that the property is being used for charitable purposes and that the charity is registered with the Charity Commission. Property owners should consult with their local council to determine their eligibility for charitable relief and the necessary steps to apply for it.
In some cases, property owners may be able to claim hardship relief if they are experiencing financial difficulties that prevent them from paying business rates on their empty property. Hardship relief is granted at the discretion of the local council and is intended to provide temporary relief to property owners who are struggling to meet their financial obligations. Property owners must provide evidence of their financial hardship, such as income statements, bank statements, or proof of debt, to support their application for hardship relief.
Property owners can also consider taking proactive measures to minimize their liability for business rates on empty property. This may include negotiating with their local council to agree on a reduced rate or payment plan that is more manageable for them. Property owners can also explore alternative uses for their empty property, such as conversion into residential units, coworking spaces, or storage facilities, to generate income and reduce their liability for business rates.
In conclusion, avoiding business rates on empty property can be a challenging task for property owners, but there are several strategies that they can use to minimize the impact of these rates. By applying for empty property relief, considering temporary occupation, exploring charitable relief, claiming hardship relief, and taking proactive measures to reduce their liability, property owners can effectively manage their vacant properties and avoid unnecessary charges. It is important for property owners to consult with their local council and seek professional advice to determine the best course of action for their specific circumstances. With careful planning and strategic decision-making, property owners can successfully navigate the complexities of business rates on empty property and protect their financial interests.