Business rates on vacant property, also known as empty property rates or business rates on empty buildings, are a tax levied on commercial properties that are unoccupied and not being put to productive use These rates are put in place by the government to discourage property owners from leaving their buildings vacant for extended periods of time and to encourage them to bring these properties back into use Understanding how business rates on vacant property are calculated and what exemptions or reliefs may be available is crucial for property owners to manage their finances efficiently.
The calculation of business rates on vacant property is based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA) This rateable value is multiplied by the relevant multiplier set by the government to determine the annual business rates payable For vacant properties, the rateable value is usually the market rent that the property could achieve if it were rented out on the open market at the time of assessment However, it is important to note that the rateable value does not take into account the actual rent or value of the property when it was last occupied.
Property owners are required to pay business rates on vacant property for a period of time after the property becomes empty In most cases, the rates are payable for the first three months that the property is empty After this initial three-month period, the property owner is entitled to a 100% relief for a further three months This means that they are not required to pay any business rates during this relief period However, if the property remains vacant after the six-month mark, the property owner will be required to pay the full business rates on the property.
There are certain exemptions and reliefs that may apply to business rates on vacant property, depending on the circumstances The most common exemption is when a property is exempt from business rates if it has a rateable value below a certain threshold business rates vacant property. In England, this threshold is £2,600, while in Wales and Scotland, it is £2,900 and £1,700, respectively Properties that fall below this threshold do not have to pay any business rates on the property, whether it is occupied or vacant.
Another common relief for business rates on vacant property is the Section 44A Empty Property Rates Relief This relief applies to properties that have been empty for more than three months and are undergoing or in need of major repair or structural alteration to bring them back into use Property owners may be entitled to a 50% discount on the business rates payable on the property for a maximum of 12 months This relief is designed to encourage property owners to invest in their properties and bring them up to standard for occupation.
It is important for property owners to be aware of the exemptions and reliefs available to them regarding business rates on vacant property By taking advantage of these measures, property owners can reduce the financial burden of empty property rates and potentially save a significant amount of money However, it is essential to comply with the regulations and guidelines set by the local authorities to avoid any penalties or legal action for non-payment of business rates.
In conclusion, business rates on vacant property can be a significant financial burden for property owners, especially if they are not aware of the exemptions and reliefs available to them Understanding how these rates are calculated, as well as the various exemptions and reliefs that may apply, is essential for property owners to manage their finances effectively By taking advantage of the relief measures and complying with the regulations set by the local authorities, property owners can minimize the impact of business rates on vacant property and ensure that their properties are brought back into productive use as soon as possible.