When it comes to owning property, whether it be for residential or commercial purposes, there are various costs and requirements that come with it. One of the factors that property owners need to consider is the payment of business rates, which is a tax levied by local authorities on non-domestic properties. However, what happens when a property becomes vacant? Are business rates still applicable on a vacant property? In this article, we will delve into the topic of business rates on vacant property.
Business rates are a tax imposed on non-domestic properties such as shops, offices, warehouses, and factories. The amount of business rates to be paid is determined by the rateable value of the property, which is assessed by the Valuation Office Agency (VOA). The rateable value is used to calculate the amount of business rates a property owner needs to pay each year.
In the case of a vacant property, the question arises as to whether business rates still need to be paid. The answer to this question is not straightforward and depends on a few factors. Generally, business rates are still applicable on vacant properties, unless certain exemptions or reliefs apply.
One of the exemptions that property owners can benefit from is the Empty Property Rate Relief. This relief allows property owners to claim a 100% exemption from paying business rates on a property that has been vacant for a certain period of time. The length of time for which the exemption applies varies depending on the location of the property. In England, for example, the Empty Property Rate Relief applies for the first three months that a property is empty. After the initial three months, the property owner will be required to pay the full business rates unless they qualify for other reliefs or exemptions.
Another option for property owners is the Government’s recent COVID-19 measures regarding business rates on vacant properties. In response to the pandemic, the Government has introduced a relief scheme that provides a 100% discount on business rates for certain occupied properties in the retail, hospitality, and leisure sectors. This relief also extends to vacant properties in these sectors, providing much-needed financial support to property owners during these challenging times.
It is important for property owners to be aware of the rules and regulations surrounding business rates on vacant properties in order to avoid any penalties or fines. Failure to pay business rates on a vacant property can result in legal action, fines, and an increase in the amount owed.
In addition to exemptions and reliefs, property owners also have the option to negotiate with the local council to reduce the amount of business rates payable on a vacant property. This can be done by providing evidence of the property’s condition, market demand, or any other relevant factors that may impact the rateable value of the property.
Property owners should also be aware that there are certain circumstances where business rates may not apply to a vacant property. For example, if a property is undergoing major renovation or repairs, it may be exempt from paying business rates for a certain period of time. However, it is important to check with the local council and the VOA to confirm whether the property qualifies for such an exemption.
In conclusion, business rates are still applicable on vacant properties, unless specific exemptions or reliefs apply. Property owners should be proactive in understanding the rules and regulations surrounding business rates to avoid any penalties or fines. By taking advantage of available reliefs and exemptions, property owners can effectively manage the costs associated with owning a vacant property.