If you have a property which has been left unoccupied, there are some fees and payments which you either no longer have to pay, or which come at a reduced rate. Business rates are charged on most commercial properties and often make up a large proportion of a business’ monthly overheads.
If you have an empty property, you are, understandably, going to want to reduce your outgoing payments on the property until you can get a new tenant. Empty property business rates can be reduced or stopped and can help considerably with this. Here is a guide to reducing your empty property business rates.
When Is A Property Considered Empty?
A property is considered unoccupied if it has been empty or vacant for more than 30 consecutive days and this applies to all properties which are empty, no matter if they are empty due to an upcoming sale or let, because of renovations or applying for probate. The property mustn’t be being used and all stock and business effects need to have been removed (other than the fixtures and fittings). You must contact your local council and inform them of the property becoming vacant. You may still be expected to pay council tax on the property, but some councils do offer a discount.
Commercial properties are automatically exempt from paying business rates for the first 3 or 6 months that the property is empty for, depending on the property. When you have an empty property, business rates then need to be paid in full following this period. Whilst the property is empty, the rates calculation then uses the standard multiplier, even if a lower, small business rates multiplier was applied whilst the property was utilised.
Empty Property Business Rates Relief
You do not need to pay business rates on an empty property for the first 3 months a property is empty, or for 6 months if the property is a qualifying industrial property. Once the rate-free period ends, the property must be occupied on a continuous basis for at least 6 weeks before becoming empty again for a new empty property business rate relief, but you are ineligible for a further business rate free period if there has been a change in leaseholder, tenant or ownership.
There are other empty property business rate relief and exemptions which an empty property can utilise, including:
- It is a listed building
- The rateable value is less than £2,900 (from the 1 April 2017)
- It is already exempt from business rates
- You have been declared bankrupt
- A charity is listed as the ratepayer and the property will next be used for charitable purposes
- The council or Crown have taken action to purchase the property or prohibited use or occupation of the premises
Applying For Empty Property Business Rate Relief
Once you tell your local council that the property has become empty, then empty property business rate relief will likely be automatically applied for the initial rate-free period. You will then receive a new bill, stating that you don’t have to pay business rates for the rate-free period and provide you with the figures for the whole year. However, you will receive a new bill once the rate-free period is over and have to begin paying business rates in full again.
There is further empty property business rate relief available, but this can vary depending on your local council and circumstances surrounding the property being empty. If you have applied for further business rate relief, then you need to continue paying the business rates until a decision has been made. As soon as the business stops being empty, then you must contact your local business rates office and inform them.
It is recommended that you seek professional advice regarding empty property business rates as soon as the property becomes vacant. Here at Roger Hannah, we are experienced in helping clients mitigating empty property business rates. For more information, please contact us today.