When investing in commercial property, there can be times when it is vacant and unoccupied. This can happen because of refurbishment or a lack of business tenants. It is important to know how to reduce or avoid business rates during this period.
To do this, you can look for a lower-cost option or take other measures. Keep reading to find out more!
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How to Avoid Business Rates on an Empty Property in the UK
In England, if you are using a property for commercial purposes, you will likely have to pay business rates depending on the type of use and the occupancy rate. If the property is unoccupied for an extended period, you can take steps to avoid paying business rates.
Re-classifying the property, changing its use, or deferring payment are some of the best options for avoiding business rates on empty properties. However, you must have a valid reason for taking any of these measures.
Short-term Solutions
If your property has become empty, for the first three months you won’t have to pay business rates. After this period, however, you’ll need to start paying business rates again. But, there are some situations where you can get an extension to this period. This is according to the Gov. uk website.
- Extended business rates relief
Industrial premises, such as warehouses, receive an extra three months of exemption. Listed buildings will be exempt until they are reoccupied. Buildings with a rateable value of less than £2,900 also receive exemption until they are reoccupied. For properties owned by charities, exemption is only granted if the next use of the property is largely for charitable purposes.
The same applies to community amateur sports club buildings, where exemption is only given if the next use is mostly as a sports club.
- Low rateable value
If your property is valued at £2,900 or less, business rates will not be applicable until it is reoccupied.
- Defer your business rates
A way to avoid paying costly business rates on an empty property in the short term is to defer the payment. This option allows you to pay in instalments over up to 12 months.
You will need to pay a fee and have a plan in place to pay the business rates in full within the given period. You will need to have a valid reason for the deferral, such as renovation work or unforeseen circumstances beyond your control.
Long-term solutions
- Re-classification
If your property is vacant for a long period and there is no possibility of it being used for business during this time, you can apply to have its use changed.
This would re-categorise the property as non-commercial, making it eligible for either discounted or even free business rates. To do this, you must submit a written request to the local council to have the rates reassessed.
- Charitable Occupation
Charities and community workspaces that own or use a property every month may be entitled to up to 100% business rate relief.
If you have a vacant building for an extended duration, you may benefit from allowing charitable occupation, not only saving you money but also benefiting the local community.
- Live-in Property Guardians
One of the most effective ways to avoid business rates on an empty property is to have a property guardian occupy it. This is something we specialise in at LOWE. When a property is partly occupied, its rateable value can be reduced and the owner can apply to the Valuation Office Agency to reflect this.
We can provide you with a selection of trusted and vetted property guardians to suit any property type.
Property Types that may be Exempt from Business Rates
According to Gov. uk, certain types of property may be exempt from business rates. These include:
- Agricultural land and buildings, including fish farms
- Buildings used for training or welfare of disabled people
- Buildings registered for public religious worship or church halls.
How to Avoid Business Rates on an Empty Property with Us?
At Property Saviour, we have a wealth of experience in helping our clients save money with business rate mitigation schemes for empty properties.
We offer tailored solutions such as charitable occupation, workspace occupation, and live-in property guardians – and our services have helped our clients save up to £300,000 a year.
If you’d like to learn more about how we can work with you, please don’t hesitate to reach out to a member of our team.
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