When it comes to owning commercial property, there are a number of costs that business owners need to consider One of the most significant expenses that can catch property owners off guard is business rates These rates are a form of tax that is charged on most non-domestic properties, including shops, offices, warehouses, and factories However, what many property owners may not realize is that even if their property is unoccupied, they may still be liable to pay business rates In this article, we will explore the implications of business rates on unoccupied property and provide some tips for how property owners can navigate this complex issue.
Business rates are charged by local authorities and are based on the rateable value of a property, which is determined by the Valuation Office Agency (VOA) The exact amount that a property owner will need to pay in business rates depends on the rateable value of the property and the multiplier set by the government In England, the standard multiplier for 2021/2022 is 49.9p, meaning that the rateable value of a property is multiplied by this figure to determine the annual business rates bill.
For occupied properties, paying business rates is a necessary expense that property owners must factor into their budgets However, when a property becomes unoccupied, many owners assume that they are no longer required to pay business rates Unfortunately, this is not the case In most circumstances, owners of unoccupied properties are still liable to pay business rates, albeit at a reduced rate.
Under current legislation in England, owners of unoccupied commercial properties are eligible for a 100% discount on business rates for the first three months that the property is empty After this initial period, the discount is lifted, and property owners must pay the full amount of business rates This can come as a shock to many property owners who may have assumed that they would not need to pay business rates on an unoccupied property.
To complicate matters further, in some cases, local authorities have the discretion to charge business rates on unoccupied properties at the full rate from day one business rates unoccupied property. This is known as the “empty rates” policy and is often implemented in areas where commercial properties are in high demand Property owners should check with their local authority to determine the specific rules and regulations regarding business rates on unoccupied properties in their area.
So, why do property owners need to pay business rates on unoccupied properties? The rationale behind this policy is to prevent property owners from leaving their properties empty for extended periods of time in order to avoid paying business rates By charging business rates on unoccupied properties, local authorities hope to incentivize property owners to either occupy or sell their properties, thereby stimulating economic activity and supporting local businesses.
While it may be frustrating for property owners to have to pay business rates on unoccupied properties, there are ways to mitigate this expense One option is to seek out exemptions or relief schemes that may be available to property owners in certain circumstances For example, properties that are undergoing substantial renovation or are in areas that are undergoing regeneration may be eligible for relief from business rates Property owners should consult with their local authority to determine if they qualify for any exemptions or relief schemes.
Another option for property owners with unoccupied properties is to consider renting out the property on a short-term basis By generating rental income, property owners may be able to offset the cost of business rates on the property In addition, renting out the property can help to deter vandalism and squatting, which are common concerns for owners of empty properties.
Ultimately, property owners with unoccupied properties need to be aware of their obligations when it comes to paying business rates By understanding the rules and regulations governing business rates on unoccupied properties, property owners can take proactive steps to manage this expense and protect their investment Being informed and proactive is key to navigating the complex world of business rates on unoccupied properties.