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Many commercial property owners are subject to empty property business rates under the 2007 Rating (Empty Properties) Act after only three months of their building being vacant. These are levied on any occupiable non-domestic land, such as stores, offices, and industrial structures. Local governments raise over £1 billion in empty land business rates per year, and commercial property vacancies at a four-year high—one in every ten UK shops is now vacant. If you own a vacant commercial property, though, you can be liable for relief or even be excluded from paying business rates. Beyond merely appealing the rateable value of our house, there are various options to either stop paying empty land market rates or reduce your responsibility.
Property that is not subject to market rates at all
If you own any of the following forms of property in England, regardless of whether it is occupied or not, you are excluded from paying business rates:
- Fish farms, agricultural structures, and structures with a primary agricultural function
- Property used for disabled people’s training or healthcare.
- Property that has been licenced for religious use.
Non-exempt buildings that have sat vacant for a long time
Although most commercial buildings have a three-month rate reduction cycle, certain abandoned properties can have a longer period of relief.
- Industrial properties are excluded for a further three months.
- Listed buildings are prohibited from paying business taxes until they are reoccupied.
- When reoccupied, properties with a rateable value of less than £2,900 are entirely excluded from business taxes.
- Buildings held by registered charities are completely free from commercial rates, as long as they are used for charitable purposes in the future.
Such cases in which you might be excluded or liable for exemption from market rates
And if your commercial property isn’t on the registry, you can still be excluded from paying business rates on vacant land or qualify for relief:
If there are land guards in operation
Using land guardians is one of the most successful ways to get business rate relief. This is where people move in an empty house for a short period of time in order to keep it safe and secure. Since the house is temporarily used as a residence, the tenants must pay council tax, which is slightly less expensive, saving landlords up to 90% on business taxes.
If your land can’t be used for its intended purpose
In the minds of tax collectors, whether your house is destroyed by a storm, fire, or blast, it is no longer fit for use. Beneficial occupancy” or “beneficial occupation” is the technical term for this, and assets that do not follow this criterion will be excluded from the ranking list altogether. However, the consequences must be serious, and your property must be in need of restoration rather than just being in a state of disrepair. As a result, a minor renovation will not be considered significant enough to qualify for a business rate exemption, but you would be able to get immediate relief. When the restoration work starts, the house will be deleted from the ranking list.
If there is no need for your property and it does not command an annual rent, you can sell it
In this case, the property will be deleted from the ranking system or receive a discounted rate. However, this is dependent on whether the lack of demand is due to external factors such as oversupply or high vacancy in the region, lowering the rental value of your land. Your own behavior as a landlord, such as failing to sell your property aggressively and comprehensively, will have an effect. Similarly, stringent ads, such as short-term rentals, would mean that you have not behaved properly. You will not be excluded from the ranking list as a result.
If you rent the building to a charitable organization
Commercial buildings owned by a charity are eligible for 80 percent business rate relief, which can be raised by the relevant Billing Authority by up to 100 percent. This is also so if you rent it to a school or a religious institution.
If your property has been occupied for at least six weeks
Short-term occupancy (less than six weeks)—for example, by a resident or licensee—will be overlooked, implying that market prices will continue to be charged throughout that period. This means the owners would no longer be able to take advantage of the immaterial lettings exemption. When you let your property out for more than six weeks, your rates exemption is lifted, but you can also seek a three-month duration of exemption when it becomes vacant again.
If your home is only partially populated
Under Section 44a of the Local Government Finance Act 1988, local authorities may grant relief in this situation based on inhabited and unoccupied areas. This will only occur in a temporary situation, such as where there are logistical challenges in renting a property in one location due to housing that is not yet entirely available for occupancy.
If you disagree with the end deadline, you have the right to appeal
If you don’t challenge a closure note, the VOA will value the property as if it were already finished. If you disagree with the delivery deadline, you may either discuss a new one with the Billing Authority or file a complaint with the Valuation Tribunal, claiming that it is unfair to demand the house to be finished by this date. As a result, if your appeal is successful, you will be entitled to postpone paying your business rates. This appeal must be filed within four weeks of obtaining the notice.
If you have work undertaken on your property after it has been finished
Development on a property is sometimes done after it has been fully completed. Shops, for example, are usually only finished to a shell state so that tenants can finish it to their liking. If you find yourself in this position, the Billing Authority can also serve you with a completion notice—this refers to all new assets and those that have experienced significant operational changes. You will be able to postpone paying business rates for a little longer and they would allow a fair time for any work to be done.
