Empty properties can be a burden for businesses, especially when they come with hefty business rates. Whether you own a commercial property that is currently vacant or are considering investing in a new space, understanding how to avoid business rates on empty property is crucial. In this article, we will explore five strategies to help you navigate the often complex world of business rates and potentially save your business money in the process.
1. Apply for Empty Property Relief
One of the most common ways to avoid business rates on empty property is to apply for Empty Property Relief. This relief is available for most non-domestic properties that are unoccupied for a certain period of time. In England, for example, properties are exempt from business rates for the first three months after becoming empty. After this initial period, in most cases, a 100% exemption will still apply for properties with a rateable value under a certain threshold.
To access Empty Property Relief, you will need to contact your local council and provide the necessary information to prove that the property is vacant. It is essential to stay up to date on the specific guidelines and timeframes for applying for this relief in your area, as they can vary by region.
2. Explore Small Business Rate Relief
If you are a small business owner with only one property and its rateable value is below a certain threshold, you may be eligible for Small Business Rate Relief. This relief can significantly reduce or even eliminate your business rates, making it a valuable option for those struggling with empty property costs.
To qualify for Small Business Rate Relief, you generally must use only one property and its rateable value must be below a certain level. It’s worth investigating if your business is eligible for this relief, as it could provide much-needed financial relief while your property remains empty.
3. Consider Property Guardianship
Property guardianship is a growing trend in the real estate industry that offers a unique solution to the challenge of empty properties. By placing responsible individuals or businesses in your empty property as guardians, you can potentially avoid business rates altogether. Property guardians are usually required to maintain the property and provide a level of security, which can be beneficial for both parties involved.
While property guardianship can be an attractive option for some property owners, it is essential to carefully vet potential guardians and establish clear agreements to protect your property. Working with a reputable property management company can help streamline this process and ensure that your property is in good hands.
4. Utilize Temporary Use
Another way to avoid business rates on empty property is to consider temporary uses for the space. By leasing or renting out your property for short-term events, pop-up shops, or other temporary purposes, you may be able to qualify for temporary rate relief. This can provide a welcome source of income while preventing your property from falling subject to full business rates.
Before pursuing temporary use for your empty property, it is important to research any legal restrictions or implications that may apply. Consulting with a real estate attorney or tax professional can help you navigate the complexities of temporary use and ensure that you are compliant with all regulations.
5. Appeal the Rateable Value
If you believe that the rateable value assigned to your property is inaccurate, you have the right to appeal this valuation. Challenging the rateable value can potentially lead to a reduction in your business rates, making it a valuable strategy for saving money on empty property costs.
To appeal the rateable value of your property, you will need to provide evidence to support your case, such as recent rental prices in the area or comparable properties. Working with a qualified real estate appraiser or tax advisor can help strengthen your appeal and increase your chances of success.
In conclusion, avoiding business rates on empty property is a common concern for many business owners and property investors. By exploring strategies such as Empty Property Relief, Small Business Rate Relief, property guardianship, temporary use, and appealing the rateable value, you can potentially reduce or eliminate the financial burden of business rates on your vacant property. Remember to stay informed about the specific regulations in your area and seek professional guidance when needed to make the most of these valuable tax-saving opportunities. By taking proactive steps to manage your empty property costs, you can protect your bottom line and position your business for long-term success.