Understanding Business Rate Relief For Empty Property
business rate relief for empty property is a topic that is not widely understood by many business owners and property investors. However, it can have a significant impact on their financial bottom line and can even make a difference between success and failure in some cases.
Business rates are taxes imposed by local governments on non-residential properties such as shops, offices, warehouses, and factories. These rates are based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA) every five years. Business rates can be a significant expense for businesses, especially for larger properties in prime locations.
When a property becomes empty, the owner is still liable to pay business rates on it. This can be a real financial burden, especially if the property remains empty for an extended period. In recognition of this issue, the government has introduced business rate relief for empty properties to provide some financial relief to property owners.
There are several types of business rate relief schemes available for empty properties, each with its own eligibility criteria and benefits. The most common types of business rate relief for empty properties include:
1. Empty Property Relief: This is the most straightforward form of business rate relief for empty properties. Under this scheme, properties that have been empty for more than three months are eligible for a 100% discount on their business rates for the next three months. After the initial three-month period, the discount is reduced to 50% for a further three months. Properties that have been empty for more than six months are no longer eligible for this relief.
2. Listed Building Relief: Properties that are listed buildings are eligible for 100% relief on their business rates for as long as they remain empty. This is to encourage property owners to preserve and protect historic buildings that would otherwise be at risk of neglect and deterioration.
3. Charitable Relief: Charities are eligible for 80% relief on their business rates for empty properties that are to be used for charitable purposes. This can provide significant financial savings for charities that may be struggling to cover the costs of maintaining empty properties.
4. Enterprise Zone Relief: Properties located within designated enterprise zones are eligible for 100% relief on their business rates for up to five years, even if they are empty. This is to incentivize property owners to invest in regeneration projects in economically deprived areas.
5. Small Business Rate Relief: Small businesses that occupy properties with a rateable value below a certain threshold are eligible for business rate relief. If the property becomes empty, the small business may still be eligible for relief on the empty property, depending on their circumstances.
It is important for property owners to understand the different types of business rate relief schemes available to them and to take advantage of them where possible. Empty property relief can provide a much-needed financial buffer during difficult times, such as economic downturns or periods of low demand in the property market.
There are some limitations and caveats to be aware of when applying for business rate relief for empty properties. For example, properties that are being actively marketed for sale or rent may not be eligible for empty property relief. This is to discourage property owners from deliberately keeping properties empty to avoid paying business rates.
Additionally, property owners must keep records and evidence of their efforts to market the property and actively seek tenants or buyers. Failure to do so could result in the local authority revoking the empty property relief and requiring the property owner to pay the full business rates.
Ultimately, business rate relief for empty properties can be a valuable lifeline for property owners facing financial difficulties. By understanding the different types of relief available and meeting the eligibility criteria, property owners can effectively manage their business rates and reduce their financial burdens. It is important to stay informed about changes to the business rate relief schemes and to seek professional advice if needed to ensure compliance with the regulations.