When it comes to owning and managing commercial properties, one of the biggest financial burdens that landlords face is paying business rates on empty properties. Business rates are taxes that are levied on non-domestic properties, including shops, offices, warehouses, and factories. These rates can add up quickly and become a significant expense for property owners, especially if their properties are unoccupied for an extended period of time.
In the current economic climate, with the ongoing impact of the COVID-19 pandemic and the rise of online shopping, many businesses are struggling to stay afloat. This has led to an increase in vacant commercial properties across the country. As a result, more landlords are facing the challenge of how to avoid paying business rates on empty properties.
If you are a landlord with empty commercial properties, there are several strategies you can use to minimize or even avoid paying business rates altogether. Here are some tips to help you navigate this complex issue and save money on your property expenses.
1. Temporary occupation
One of the most common ways to avoid business rates on empty property is to find a temporary occupant for the space. By allowing a short-term tenant to occupy the property, even for a brief period, you can qualify for an exemption from paying business rates. This strategy is often used by landlords who are in the process of finding a long-term tenant but want to avoid the financial burden of empty rates in the meantime.
2. Negotiate with the local council
If you are unable to find a tenant for your property, or if you are experiencing financial difficulties due to the pandemic, consider reaching out to your local council to discuss your situation. In some cases, councils may be willing to offer discounts or exemptions on business rates for empty properties, particularly if you can demonstrate that you are actively seeking tenants or that you are facing financial hardship.
3. Apply for rate relief
There are several types of rate relief schemes available for empty properties, including small business rate relief, charitable rate relief, and rural rate relief. Depending on the specific circumstances of your property and your business, you may be eligible for one or more of these relief schemes. It is worth researching the criteria for each scheme and applying for any that you may qualify for in order to reduce your business rates bill.
4. Use property guardians
Another creative solution for avoiding business rates on empty property is to utilize property guardians. Property guardians are individuals or companies that provide live-in security for vacant properties in exchange for reduced rent or free accommodation. By having property guardians occupy your empty commercial property, you can potentially qualify for an exemption from paying business rates while also benefitting from increased security and maintenance of the property.
5. Consider demolishing or repurposing the property
If your empty property has been vacant for an extended period of time and you are struggling to find a tenant or afford the business rates, it may be worth considering demolishing or repurposing the property. By demolishing the property, you can potentially avoid paying business rates altogether, as empty land is typically exempt from these taxes. Alternatively, you could explore options for repurposing the property for a different use that may attract tenants and generate income.
In conclusion, avoiding business rates on empty property can be a challenging task for landlords, especially in the current economic climate. However, by being proactive and exploring creative solutions such as temporary occupation, negotiating with the local council, applying for rate relief, using property guardians, or considering demolishing or repurposing the property, you can minimize the financial impact of empty rates and save money on your property expenses. By taking a strategic approach to managing your vacant commercial properties, you can navigate this complex issue successfully and protect your bottom line.