When it comes to owning commercial property, there are numerous expenses and considerations to take into account One of the most significant costs that property owners need to be aware of is business rates These rates are set by the local government and are charged on most non-residential properties.
However, one area that can often catch property owners off guard is the issue of business rates on unoccupied property When a commercial property sits empty, are business rates still applicable? The short answer is yes, but there are certain exemptions and considerations to be aware of.
Business rates are a tax that is charged on most non-domestic properties, including shops, offices, warehouses, and factories The rates are calculated based on the rateable value of the property, which is assessed by the Valuation Office Agency (VOA) and reviewed every five years The local council then sets the business rates based on this rateable value.
When a commercial property becomes unoccupied, the responsibility for paying the business rates falls on the property owner This means that even if a property is sitting vacant and not generating any income, the property owner is still liable for paying the business rates This can come as a surprise to many property owners who may assume that they are exempt from paying rates on an empty property.
However, there are certain exemptions and discounts available for unoccupied properties For example, if a property is undergoing major repair work or structural alterations, it may be eligible for a temporary exemption from paying business rates This exemption typically lasts for three months after the work is completed, giving the owner some breathing room to get the property back into use.
Additionally, certain types of properties may be eligible for longer periods of exemption business rates unoccupied property. For example, listed buildings are exempt from business rates for as long as they remain unoccupied Similarly, properties with a rateable value of less than £2,900 are also exempt from business rates while they are empty.
It’s important to note that these exemptions must be applied for and approved by the local council Property owners should not assume that they are automatically exempt from paying business rates on unoccupied property and should always check with the council to see if they are eligible for any exemptions or discounts.
In some cases, property owners may choose to deliberately leave a property unoccupied to avoid paying business rates However, this is not a sustainable or advisable strategy Local councils have the authority to repossess the property if the business rates are not paid, and property owners can face hefty fines and legal action for non-payment.
Instead, property owners should work with their local council to explore all available options for reducing or deferring their business rates liability on unoccupied property This may include negotiating a temporary exemption for major repair works or exploring other forms of relief that may be available.
Ultimately, property owners should be proactive in managing their business rates liability on unoccupied property By staying informed about the exemptions and discounts that are available, property owners can reduce their financial burden and ensure that they are meeting their legal obligations.
In conclusion, business rates on unoccupied property can be a significant cost for property owners to contend with While the liability for paying rates on empty properties falls on the property owner, there are exemptions and discounts available that can help to reduce this burden By working closely with their local council and staying informed about their options, property owners can navigate the complexities of business rates on unoccupied property and ensure that they are meeting their obligations in a cost-effective manner.