As a property owner, one of the most important things to consider is how much you will need to pay in business rates. These rates are used to fund local services such as schools, roads, and waste collection. However, if your property is vacant, you may be wondering whether you still need to pay business rates. This brings us to the topic of vacant property business rates.
What are vacant property business rates?
Vacant property business rates, also known as empty property rates, are a form of tax that property owners must pay if their commercial property is unoccupied. These rates were introduced by the government to incentivize property owners to bring their vacant properties back into use and prevent buildings from sitting empty for extended periods of time.
It’s important to note that vacant property business rates only apply to commercial properties, not residential ones. If you own a shop, office, or industrial building that is currently empty, you will likely be subject to these rates.
How are vacant property business rates Calculated?
The amount you will need to pay in vacant property business rates depends on the rateable value of your property. The rateable value is set by the Valuation Office Agency (VOA) and is based on the rental value of your property. The rateable value is then multiplied by the business rates multiplier to determine the amount you owe.
For vacant properties, the government offers certain exemptions and discounts on business rates. For example, if your property has been newly built or refurbished, you may be eligible for a 100% exemption for the first three months. After that period, you may receive a 50% discount on the rates for an additional three months.
It’s important to check with your local council to see if you qualify for any exemptions or discounts on vacant property business rates.
Challenges of vacant property business rates
Paying business rates on a vacant property can be a financial burden for property owners. It can also be frustrating, especially if you are actively trying to find tenants or buyers for your property but have been unsuccessful.
Many property owners argue that vacant property business rates discourage investment in commercial properties and can lead to properties sitting empty for longer periods of time. This can have a negative impact on the local economy and community.
Furthermore, there have been cases of property owners intentionally leaving their buildings empty to avoid paying business rates. This can result in vacant properties becoming eyesores or even safety hazards in a neighborhood.
How to Minimize Vacant Property Business Rates
There are several strategies property owners can use to minimize the impact of vacant property business rates. One option is to actively market your property to potential tenants or buyers. By filling the space with a new occupant, you can avoid paying the full business rates on the property.
Another option is to explore temporary uses for the property, such as pop-up shops or events. Some local councils offer exemptions or discounts for properties being used for short-term purposes. This can help generate income while also reducing the amount you owe in business rates.
Additionally, property owners can work with local authorities to negotiate a lower rate on their vacant property business rates. Some councils may be willing to offer concessions or payment plans to help alleviate the financial strain on property owners.
Conclusion
Vacant property business rates are an important consideration for property owners with unoccupied commercial properties. Understanding how these rates are calculated and exploring options for minimizing their impact can help property owners navigate this aspect of owning a vacant property.
While vacant property business rates can be challenging, they are designed to incentivize property owners to bring their buildings back into use. By actively seeking tenants or exploring temporary uses for their properties, owners can reduce the financial burden of these rates and contribute to the vitality of their local communities.