If you own or manage commercial property in the UK, you are likely familiar with business rates – the tax imposed by local authorities on non-residential properties. However, what you may not be aware of is the concept of business rates empty property exemption. This exemption can provide significant savings for property owners during periods when their property is unoccupied.
Business rates are a significant operating cost for most businesses with physical premises in the UK. The amount payable is determined by the rateable value of the property, as well as the multiplier set by the government. When a property becomes unoccupied, the responsibility for paying business rates falls on the property owner rather than the tenant, which can create a financial burden, especially during prolonged vacancy periods.
To alleviate this burden, the government has introduced exemptions for business rates on empty properties. These exemptions are designed to incentivize property owners to bring vacant properties back into use and prevent the blight of empty storefronts in town centers.
One of the most common exemptions is the empty property exemption, which provides relief from business rates for a set period after a property becomes vacant. The length of the exemption period varies depending on the type of property and its rateable value, but it typically ranges from three to six months for industrial properties and six to twelve months for all other types of properties.
It is important to note that the empty property exemption only applies to properties that are genuinely empty and not being used for any purpose. If a property is being used for storage or any other activity, it will not qualify for the exemption, and the full business rates will be payable.
In addition to the empty property exemption, there are other types of relief available for unoccupied properties. For example, if a property is undergoing major repairs or structural changes, the owner may be able to apply for a temporary exemption from business rates until the work is completed. There are also reliefs available for certain types of properties, such as charities or community amateur sports clubs.
It is important for property owners to be aware of the exemptions and reliefs available to them, as failing to apply for them can result in unnecessary financial strain. The process of applying for business rates exemptions can vary depending on the local authority, so it is recommended to seek professional advice to ensure that you are maximizing your savings.
In addition to the financial benefits, there are also other advantages to bringing empty properties back into use. Vacant properties can attract vandalism, squatting, and other criminal activities, which can have a negative impact on the surrounding area. By occupying and maintaining a property, owners can contribute to the vibrancy and safety of the community.
Furthermore, revitalizing empty properties can stimulate economic growth by attracting new businesses and creating jobs. Vacant storefronts can deter customers and reduce footfall in town centers, but by filling these spaces with thriving businesses, property owners can help to rejuvenate the local economy.
Overall, the business rates empty property exemption is a valuable tool for property owners looking to minimize their financial obligations while also contributing to the vitality of their local community. By taking advantage of the exemptions and reliefs available, owners can make strategic decisions to ensure that their properties remain profitable and sustainable in the long term.