When it comes to owning property, whether residential or commercial, there are various costs and taxes that must be taken into account One such cost that property owners often overlook is business rates on vacant property In this article, we will explore what business rates on vacant property are, how they are calculated, and what property owners need to know to avoid potential pitfalls.
Business rates, also known as non-domestic rates, are taxes that are levied on most non-domestic properties, including commercial properties such as shops, offices, factories, and warehouses These rates are based on the rental value of the property and are set by the local government However, when a property becomes vacant, the rules regarding business rates change.
Under normal circumstances, business rates are the responsibility of the occupier of the property However, when a property becomes vacant, the liability for paying business rates falls on the owner of the property This can come as a surprise to many property owners who may not be aware of this change in responsibility.
The rateable value of a property is determined by the Valuation Office Agency (VOA), and it is used to calculate how much business rates are owed When a property is vacant, the rateable value may be reduced by 100% for a certain period of time, depending on the local council’s policy This period is typically three months for industrial properties and six months for other commercial properties After this initial period, the property owner may be required to pay the full business rates.
It is important for property owners to be aware of the rules regarding business rates on vacant property to avoid potential penalties Failure to pay business rates on a vacant property can result in hefty fines and legal action business rates vacant property. Property owners should also be aware that even if a property is not actively being used, it may still be liable for business rates if it is capable of beneficial occupation.
There are some exemptions and reliefs available for vacant properties that property owners can take advantage of to reduce their business rates liability One such relief is the empty property relief, which allows property owners to receive a 100% discount on business rates for a limited period of time This relief is available for most vacant commercial properties for the first three months that the property is empty After this initial period, the property owner may be eligible for a 50% discount on the business rates.
Another relief that property owners can apply for is the charity and community amateur sports club relief This relief provides an 80% discount on business rates for eligible properties that are used for charitable purposes or as a community amateur sports club.
It is important for property owners to be proactive in claiming any available reliefs and exemptions to reduce their business rates liability on vacant properties This can help save money and avoid unnecessary financial burdens.
In addition to exemptions and reliefs, property owners can also take steps to mitigate their business rates liability on vacant properties For example, property owners can consider leasing the property on a short-term basis to avoid paying the full business rates This can help generate income and reduce the financial strain of owning a vacant property.
Overall, business rates on vacant property can be a complex and confusing issue for property owners It is important for property owners to understand how business rates are calculated, their liability for paying business rates on vacant properties, and what exemptions and reliefs are available to them By being informed and proactive, property owners can effectively manage their business rates liability and avoid potential penalties.