When it comes to owning commercial property, there are various expenses that owners need to account for, one of which is business rates Business rates are a form of tax that is charged on most commercial properties, including shops, offices, and warehouses However, when a property becomes unoccupied, the rules surrounding business rates can become a bit more complex.
In the UK, business rates are based on the rateable value of a property, which is determined by the Valuation Office Agency (VOA) The amount of business rates that a property owner must pay is calculated by multiplying the rateable value by the ‘multiplier’ set by the government The multiplier is a figure that is set annually and is used to determine the overall rate bill for a property.
For unoccupied commercial properties, owners may still be liable to pay business rates, depending on the circumstances Generally, if a property is empty for a short period of time, the owner is entitled to a period of ’empty property rate relief’ This relief period is usually 3 months for most commercial properties, after which the owner will be required to pay the full business rates.
However, there are some exceptions to this rule Properties that are classed as ‘listed buildings’ or are considered to be of historical significance may be entitled to longer periods of relief Additionally, properties that are in need of major repairs or renovations may also be eligible for extended periods of empty property rate relief business rates unoccupied property. It is important for property owners to check with their local council to see if their property qualifies for any exemptions or relief periods.
In some cases, property owners may be able to avoid paying business rates on unoccupied property altogether For example, if a property has a rateable value of less than £2,900, it will be exempt from business rates entirely, even when unoccupied This is known as ‘small business rate relief’ and is designed to support small businesses and property owners with lower value properties.
Another option for property owners looking to avoid paying business rates on unoccupied property is to consider ‘property guardianship’ Property guardianship involves allowing individuals or companies to occupy a property temporarily in exchange for providing security and maintenance services By having property guardians in place, the property is considered to be ‘occupied’ for the purposes of business rates, and the owner may be entitled to a discount or exemption.
It is important for property owners to be aware of the rules surrounding business rates for unoccupied property, as failing to pay can result in hefty fines and legal action In some cases, local councils may also be able to take possession of the property if business rates are not paid, which can have serious implications for the owner’s investment.
In conclusion, business rates for unoccupied property can be a tricky and sometimes costly aspect of owning commercial real estate Property owners should be proactive in understanding their obligations and exploring any potential relief options that may be available to them By staying informed and seeking professional advice when needed, property owners can ensure that they are compliant with business rates regulations and avoid any unnecessary financial burdens.