When it comes to owning commercial property, one of the inevitable expenses that business owners have to deal with is business rates. These rates are taxes paid on non-domestic properties to help fund local services. However, there are certain situations where property owners may qualify for an exemption from paying business rates on their empty properties. This exemption, known as the business rates empty property exemption, can provide significant financial relief to business owners during periods when their properties are unoccupied.
The business rates empty property exemption is designed to incentivize property owners to bring their vacant properties back into use. It allows properties to remain exempt from paying business rates for a certain period of time, giving property owners the breathing space they need to find suitable tenants or buyers. This exemption can be a lifeline for businesses facing financial difficulties or struggling to find tenants in a challenging market.
So, how does the business rates empty property exemption work? In the UK, most non-domestic properties are subject to business rates, including retail shops, offices, warehouses, and factories. When a property becomes empty and unoccupied, the owner is usually still liable to pay business rates on it. However, there are certain circumstances where the property may be eligible for exemption.
The most common exemption is the 100% empty property rate relief, which applies to properties that have been empty for a specified period. In England, this period is typically three months for commercial properties and six months for industrial properties. After this initial period, the property owner may be eligible for a further three months of exemption, bringing the total exemption period to six months for commercial properties and twelve months for industrial properties. In Scotland and Wales, the rules for empty property exemption may differ, so property owners should check with the local authorities for specific guidance.
It is important to note that the business rates empty property exemption does not apply automatically. Property owners need to apply for the exemption through their local council or authority. They may be required to provide evidence of the property’s vacancy, such as utility bills, lease agreements, or photographs of the empty property. Once the council has verified the property’s eligibility, they will grant the exemption and adjust the business rates bill accordingly.
While the business rates empty property exemption can provide much-needed relief for property owners, it is not a permanent solution. The government is keen to discourage long-term vacancies and incentivize property owners to bring their empty properties back into use. To this end, they have introduced several measures to limit the duration of the empty property exemption.
One such measure is the introduction of the empty property rates premium, which applies to properties that have been empty for more than two years. The premium is an additional tax on top of the standard business rates, intended to discourage property owners from leaving their properties empty for extended periods. This additional cost can be a significant burden for property owners and may incentivize them to find tenants or buyers sooner rather than later.
In addition to the empty property rates premium, the government has also introduced various other measures to encourage property owners to bring their empty properties back into use. These include business rates relief schemes for new businesses occupying previously empty properties, as well as grants and incentives for property owners to renovate and redevelop their vacant properties.
In conclusion, the business rates empty property exemption can provide much-needed financial relief to property owners facing vacancies in their commercial properties. By allowing properties to remain exempt from paying business rates for a specified period, the exemption gives property owners the time they need to find suitable tenants or buyers. However, property owners should be aware of the limitations of the exemption and take steps to bring their vacant properties back into use to avoid incurring additional costs. By working closely with their local council and taking advantage of government incentives, property owners can make the most of the business rates empty property exemption and ensure their properties remain a valuable asset in the long term.