Business rates can be a hefty financial burden for property owners, especially when their properties sit empty. Empty property rates are a tax levied on commercial properties that have been vacant for a certain period of time, and can add up to thousands of pounds each year. However, there are several strategies that property owners can use to avoid or reduce their business rates on empty property. In this article, we will explore five effective strategies for minimizing the impact of business rates on vacant properties.
1. Temporary occupation
One way to avoid paying business rates on an empty property is to temporarily occupy the space with a short-term tenant or pop-up shop. By allowing a temporary tenant to use the space for a short period of time, the property owner can claim an exemption from business rates for up to six months. This strategy can be particularly effective for properties in prime locations that are likely to attract interest from short-term tenants, such as retail units in busy shopping districts or office spaces in central business districts.
2. Use as storage or industrial purposes
Another way to avoid business rates on empty property is to use the space for storage or industrial purposes. In some cases, properties that are used for storage or industrial activities may qualify for a partial or full exemption from business rates. This can be a viable option for property owners who are unable to find a tenant for their space but still want to generate some income from the property while avoiding the full burden of business rates.
3. Demolition or redevelopment
For property owners who are unable to find a temporary tenant or use the space for alternative purposes, demolition or redevelopment of the property may be a viable option for avoiding business rates on empty property. By demolishing the existing structure or redeveloping the property for a different use, the property owner can apply for an exemption from business rates for the duration of the construction work. This strategy can be particularly effective for properties that are in need of major renovations or are not suitable for use in their current state.
4. Appeal the rateable value
Property owners who believe that the rateable value of their property is inaccurate or unfair can appeal to the Valuation Office Agency (VOA) to have it reassessed. By providing evidence of comparable properties with lower rateable values or demonstrating that the property is overvalued for its location or condition, property owners may be able to secure a reduction in their business rates. While appealing the rateable value can be a lengthy and complex process, it can result in significant savings on business rates for properties that are currently empty or underutilized.
5. Seek professional advice
Finally, property owners who are struggling to manage their business rates on empty property may benefit from seeking professional advice from a chartered surveyor or property tax specialist. These experts can provide guidance on the most effective strategies for reducing business rates, whether through temporary occupation, alternative uses, appeals, or other methods. By working with a professional advisor, property owners can maximize their savings on business rates and minimize the financial impact of owning empty property.
In conclusion, business rates on empty property can be a significant financial burden for property owners, but there are several strategies that can help minimize the impact. By exploring options such as temporary occupation, alternative uses, demolition or redevelopment, rateable value appeals, and professional advice, property owners can avoid or reduce their business rates on vacant properties. By taking proactive steps to manage their business rates, property owners can protect their investments and ensure that their properties remain financially viable in the long term.