Business rates are a common concern for property owners, but what happens when a property sits empty? Many owners are surprised to learn that even vacant properties are subject to business rates This can be a major financial burden, especially for owners who are struggling to find tenants or who have invested in a property that is not currently generating income.
Business rates are a tax that is levied on most non-domestic properties, including shops, offices, warehouses, factories, and leisure facilities The rates are set by the government and are based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA) The rates are payable by the owner of the property and are used to fund local services, such as schools, roads, and waste disposal.
One common misconception about business rates is that properties that are empty do not have to pay them While there are some exemptions for certain types of empty properties, such as newly built properties that are not yet occupied or properties that are undergoing renovation, most empty properties are still liable for business rates This is because the government wants to discourage property owners from leaving properties empty for long periods of time by making it financially burdensome to do so.
The rateable value of a property is generally based on its rental value, assuming it is in a reasonable state of repair and is capable of being let Therefore, even if a property is empty, it is still considered to have a rental value and is subject to business rates This can come as a shock to property owners who may have assumed that they would not have to pay rates on a property that is not generating any income.
So what can property owners do if they are faced with paying business rates on a vacant property? One option is to try to qualify for an exemption As mentioned earlier, there are some exemptions available for certain types of empty properties, such as properties that are undergoing renovation or are unoccupied due to legal reasons, such as repossession business rates on vacant property. Property owners should check with their local council to see if they qualify for any exemptions and how they can apply for them.
Another option is to try to reduce the rateable value of the property Property owners can appeal the rateable value set by the VOA if they believe it is too high This can be a lengthy and complicated process, but if successful, it can result in a lower tax bill Property owners should consult with a surveyor or rating agent who can help them navigate the appeals process and provide advice on how to present their case effectively.
Property owners can also take steps to actively market the property in order to find a tenant as quickly as possible Not only will this help to generate income and reduce the financial burden of paying business rates on an empty property, but it may also increase the rateable value of the property, as it will be considered more desirable to potential tenants.
Ultimately, paying business rates on a vacant property can be a difficult pill to swallow for property owners, especially those who are already facing financial challenges However, it is important to understand that these rates are a legal obligation and must be paid, unless the property qualifies for an exemption By exploring all available options, seeking professional advice, and taking proactive steps to market the property, owners can hopefully minimize the financial impact of paying business rates on a vacant property.