When it comes to owning commercial property, one of the key considerations that every property owner must take into account is business rates. Business rates are taxes paid on non-domestic properties such as shops, offices, and warehouses. These rates are set by the local government and are used to fund local services and infrastructure.
However, when a commercial property becomes vacant, property owners may be eligible for a business rates exemption or relief. This is known as vacant property business rates. In this article, we will explore what vacant property business rates are, how they are calculated, and how property owners can take advantage of them.
vacant property business rates are essentially a form of relief provided to property owners when their commercial property is empty. This relief is designed to help property owners manage the financial burden of owning a vacant property and encourage them to bring the property back into productive use.
Property owners are eligible for vacant property business rates relief if their property has been vacant for a certain period of time. The exact criteria for eligibility vary depending on the local authority, but in general, property owners must prove that their property has been empty for a specified period, typically three months or more.
Once a property owner has been granted vacant property business rates relief, they will be able to claim a percentage reduction on their business rates bill. The amount of relief can vary depending on the local authority, but it is typically around 50% for the first three months of vacancy, and 100% thereafter.
It is important to note that vacant property business rates relief is not automatic and property owners must apply for the relief in order to receive it. This can usually be done by contacting the local council or filling out an online application form.
So, how are vacant property business rates calculated? The rateable value of a property is used as the basis for calculating business rates. The rateable value is an estimate of the annual rent that the property could fetch on the open market, as determined by the Valuation Office Agency.
When a property becomes vacant, it is given a reduced rateable value for the purposes of calculating business rates. This reduced rateable value is known as the “empty property rate”. The empty property rate is typically based on 100% of the rateable value for the first three months of vacancy, and 50% thereafter.
It is worth noting that the rules around vacant property business rates can be complex and vary depending on the location of the property. Property owners are advised to seek guidance from their local council or a professional advisor to ensure they are taking advantage of all available relief options.
There are some additional factors that property owners should be aware of when it comes to vacant property business rates. For example, if a property is being redeveloped or undergoing major repairs, it may still be eligible for vacant property business rates relief. However, property owners will need to provide evidence to the local council that the property is not capable of occupation during this time.
In some cases, property owners may also be eligible for business rates relief if their property is classified as “hard to let” or “unfit for occupation”. This special exemption is designed to help property owners who are struggling to find tenants for their property due to factors such as location or condition.
In conclusion, vacant property business rates can be a valuable relief for property owners who find themselves with an empty commercial property. By understanding the criteria for eligibility and how relief is calculated, property owners can take advantage of this relief to help manage the financial burden of owning a vacant property.