empty property rates, also known as business rates on vacant properties, can be a significant financial burden for property owners. When a property is left empty, the local council may charge business rates on the property, even if it is not being used for business purposes. This can result in owners facing hefty bills, which can eat into their profits or even force them to sell the property. In this article, we will explore what empty property rates are, how they are calculated, and provide some tips on how property owners can manage and reduce these costs.
empty property rates were introduced in England and Wales in 2008 as a way to incentivize property owners to bring vacant properties back into use. The idea behind the rates is to discourage property owners from leaving their properties empty for extended periods of time, as this can have a negative impact on the local community. The rates are typically charged at the same rate as regular business rates, but with some exemptions and reliefs available in certain circumstances.
One of the key considerations when it comes to empty property rates is how they are calculated. The rates are typically calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). The rateable value is then multiplied by the relevant multiplier set by the government to determine the amount of business rates that are due. It is important to note that properties with a rateable value of less than £2,900 are exempt from empty property rates, as are certain types of properties, such as industrial premises undergoing repair or construction.
Property owners may also be eligible for certain reliefs and exemptions that can help reduce the amount of empty property rates they have to pay. For example, properties that are owned by charities or community amateur sports clubs may be eligible for 80% relief on empty property rates. Properties that are empty for a short period of time due to repair or structural work may also be eligible for relief, as long as the work is being carried out with the intention of bringing the property back into use. Additionally, properties that are empty and have been recently used for a particular purpose, such as agricultural use, may be eligible for relief.
There are also some strategies that property owners can employ to manage and reduce their empty property rates. One option is to consider leasing the property out on a short-term basis to a pop-up shop or temporary tenant. This can help generate some income from the property, which may offset the cost of the empty property rates. Property owners could also consider applying for any available reliefs or exemptions that they may be eligible for, as mentioned earlier. It is also worth exploring the possibility of negotiating with the local council to see if they may be willing to offer any flexibility on the payment of empty property rates.
Property owners should also keep in mind that there are certain steps they can take to mitigate the risk of incurring empty property rates in the first place. For example, they could explore alternative uses for the property, such as converting it into residential units or coworking spaces. This can help ensure that the property remains in use and generates income, thereby avoiding empty property rates. Property owners could also consider investing in security measures for the property, such as CCTV cameras or alarm systems, to help deter potential squatting or vandalism, which could result in the property being deemed empty for rating purposes.
In conclusion, empty property rates can be a significant financial burden for property owners, but there are strategies that can be employed to manage and reduce these costs. By understanding how empty property rates are calculated, exploring available reliefs and exemptions, and implementing proactive measures to keep the property in use, property owners can help alleviate the financial impact of empty property rates. It is important for property owners to stay informed about the rules and regulations surrounding empty property rates and to seek professional advice if they are unsure about how to best manage these costs.