Commercial property owners can face significant financial challenges when their properties are vacant. Not only are they not receiving any rental income, but they are also still required to pay business rates on the empty property. However, there are measures in place to provide some relief for these property owners in the form of empty rates relief. This article will explore what commercial property empty rates relief is, how it works, and how property owners can take advantage of it.
Empty rates relief, also known as empty property rates relief, is a scheme designed to alleviate the financial burden placed on commercial property owners when their properties are empty. Business rates are taxes that businesses need to pay on most types of non-domestic property, including shops, offices, pubs, warehouses, and factories. However, when a commercial property becomes vacant, the property owner is still liable to pay business rates on the empty property unless they qualify for empty rates relief.
There are several types of empty rates relief available to commercial property owners, each with its own eligibility criteria and conditions. The most common form of empty rates relief is the mandatory 3-month empty property rate exemption. This means that commercial properties are exempt from paying business rates for the first three months after they become vacant. After the initial 3-month period, some properties may be eligible for additional empty rates relief, such as the 100% empty property rates relief for industrial properties or the 50% empty property rates relief for retail properties.
In addition to these mandatory empty rates relief schemes, local authorities have the power to grant discretionary empty rates relief to certain properties. This is usually done on a case-by-case basis and is typically reserved for properties that are undergoing refurbishment or redevelopment. Property owners can apply for discretionary empty rates relief by contacting their local council and providing evidence of their plans for the property.
It’s important for commercial property owners to be aware of the various empty rates relief options available to them and to take advantage of them whenever possible. Paying business rates on an empty property can be a significant financial burden, especially if the property remains vacant for an extended period of time. By claiming empty rates relief, property owners can reduce their costs and make their properties more attractive to potential tenants.
There are several ways that property owners can maximize their chances of qualifying for empty rates relief. Firstly, it’s important to keep accurate records of when the property became vacant and to notify the local council as soon as possible. Property owners should also provide evidence of any efforts they have made to market the property for rent or sale, as this can help to demonstrate that they are actively trying to bring the property back into use.
Another way to potentially qualify for empty rates relief is to make the property available for short-term rental or temporary occupation. By doing so, property owners may be able to show that they are making efforts to generate income from the property, even if it is only temporary. This can help to demonstrate to the local council that the property is not being deliberately left vacant to avoid paying business rates.
In conclusion, commercial property owners facing the financial burden of empty property rates should explore the various empty rates relief options available to them. By taking advantage of these schemes, property owners can reduce their costs and make their properties more attractive to potential tenants. It’s important to keep accurate records, notify the local council promptly, and demonstrate efforts to market the property in order to maximize the chances of qualifying for empty rates relief. With careful planning and proactive measures, property owners can mitigate the financial impact of empty property rates and protect their investment in commercial real estate.