For many businesses, managing property can be a complex and costly affair. One of the most significant expenses for property owners is business rates, which are taxes levied on non-residential properties based on their rateable value. However, there are legal ways for property owners to reduce or avoid business rates on empty properties. In this article, we will discuss five strategies that property owners can use to minimize the impact of business rates on their vacant properties.
1. Temporary occupation
One of the most effective strategies for avoiding business rates on empty property is to allow the property to be temporarily occupied. The law states that properties that are occupied for a short period are exempt from business rates. This means that property owners can rent out their empty properties for short-term purposes such as events, pop-up shops, or temporary storage to avoid paying business rates.
By actively seeking temporary occupants for their empty properties, property owners can ensure that their properties are not classified as vacant for business rates purposes. This strategy allows property owners to generate income from their empty properties while avoiding the financial burden of business rates.
2. Small business rates relief
Another strategy that property owners can use to avoid business rates on empty property is to apply for small business rates relief. This scheme is designed to help small businesses that have properties with a rateable value below a certain threshold. Property owners who qualify for small business rates relief may be eligible for a significant reduction in their business rates bill.
By applying for small business rates relief, property owners can reduce the amount of business rates they are required to pay on their empty properties. This strategy can provide much-needed financial relief for property owners who are struggling to cover the costs associated with owning vacant properties.
3. Charitable relief
Property owners who own empty properties that are used for charitable purposes may be eligible for charitable relief on their business rates. Charitable relief is available to properties that are occupied by registered charities or community amateur sports clubs. Property owners who qualify for charitable relief may be entitled to a full exemption from business rates on their vacant properties.
By working with charitable organizations to occupy their empty properties, property owners can benefit from charitable relief and avoid paying business rates altogether. This strategy not only helps property owners save money on their business rates bills but also supports worthy charitable causes in the community.
4. Marketing and promotion
In some cases, property owners may be able to avoid business rates on empty property by actively marketing and promoting their properties for sale or lease. The law states that properties that are actively being marketed for sale or lease are exempt from business rates for a certain period. This means that property owners can avoid paying business rates on their vacant properties while they are actively seeking new tenants or buyers.
Property owners can use a variety of marketing and promotional techniques to attract potential buyers or tenants to their empty properties. This may include listing the property on real estate websites, promoting it on social media, or working with a commercial real estate agent to find suitable tenants or buyers. By actively marketing their empty properties, property owners can take advantage of the business rates exemption and avoid unnecessary costs.
5. Demolition or renovation
Finally, property owners who are unable to find temporary occupants or buyers for their empty properties may consider demolishing or renovating the properties to avoid paying business rates. The law states that properties that are undergoing significant demolition or renovation work are exempt from business rates for a certain period.
By demolishing or renovating their empty properties, property owners can qualify for a temporary exemption from business rates while they work to bring the properties back into productive use. This strategy may require a significant investment of time and resources, but it can help property owners avoid paying business rates on properties that would otherwise remain empty and unproductive.
In conclusion, there are several strategies that property owners can use to avoid business rates on empty property. By employing tactics such as temporary occupation, small business rates relief, charitable relief, marketing and promotion, or demolition and renovation, property owners can minimize the financial impact of business rates on their vacant properties. By taking proactive steps to address the issue of business rates, property owners can protect their bottom line and ensure that their properties remain profitable and productive.