Business rates are a tax on non-domestic properties in the United Kingdom. They are charged by local authorities to help pay for local services. However, there are certain exemptions and reliefs available to certain types of properties. One of these is the business rates empty property exemption.
The business rates empty property exemption applies to vacant non-domestic properties. This means that if a property is unoccupied, it may be exempt from paying business rates for a certain period of time. This exemption provides some relief for property owners who are unable to find tenants or are in the process of refurbishing or redeveloping their property.
The purpose of the business rates empty property exemption is to help property owners avoid financial hardship when their property is not generating any income. It also encourages property owners to bring vacant properties back into use, thus benefiting the local economy.
There are certain conditions that must be met in order to qualify for the business rates empty property exemption. Firstly, the property must be completely unoccupied. This means that there should be no one living or working in the property, and it should not be used for any business activities.
Secondly, the property must have been empty for a certain period of time. The duration of the exemption varies depending on the type of property. For instance, industrial properties are typically granted a 100% exemption for the first three months, followed by a 50% exemption for the next three months. After six months, the property will be liable for the full business rates.
It is important to note that the business rates empty property exemption is not automatic. Property owners must apply for the exemption through their local authority. They may be required to provide evidence of the property’s vacancy, such as utility bills, insurance documents, or proof of marketing efforts to find a tenant.
Property owners should also be aware that there are certain circumstances in which the business rates empty property exemption may not apply. For example, properties that are in the process of being demolished or undergoing substantial repair works may not be eligible for the exemption.
In addition, properties that are exempt from business rates under other reliefs or exemptions, such as listed buildings or agricultural buildings, may not be eligible for the business rates empty property exemption.
It is also worth mentioning that changes to the business rates system in recent years have made it more challenging for property owners to qualify for exemptions and reliefs. The government has introduced measures to crack down on empty properties and vacant properties that are deliberately left vacant to avoid paying business rates.
For instance, since April 2017, properties with a rateable value of over £2,900 that have been empty for over three months are subject to a 100% premium on their business rates. This means that property owners will be charged an additional 50% on top of their existing rates if their property remains vacant for an extended period of time.
This has led to some controversy, with property owners arguing that the punitive measures are unfair and may discourage investment in certain areas. However, the government maintains that the aim of these measures is to incentivize property owners to bring vacant properties back into use and contribute to the local economy.
In conclusion, the business rates empty property exemption is a valuable relief for property owners who are facing financial difficulties due to vacant properties. However, it is important for property owners to be aware of the conditions and requirements for the exemption, and to ensure that they comply with the rules to avoid penalties. By understanding the business rates system and taking advantage of available reliefs and exemptions, property owners can better manage their financial obligations and contribute to the economic growth of their local area.