As a business owner or property owner, you may be familiar with the concept of business rates – the tax businesses must pay on the non-domestic properties they occupy. However, you may not be as familiar with void business rates, a term that refers to the rates that must be paid on a property that is empty.
What are void business rates?
Void business rates are the rates that must be paid on a commercial property that is empty. In the United Kingdom, business rates are charged on most non-domestic properties, including shops, offices, and warehouses. These rates are calculated based on the rateable value of the property and are used to fund local services such as schools, roads, and waste collection.
When a property is empty, the owner is still required to pay business rates unless they qualify for certain exemptions. This can be a significant financial burden for property owners, especially if the property remains empty for an extended period of time.
Exemptions and Relief
There are some exemptions and reliefs available to property owners who are liable for void business rates. For example, properties that are empty for less than three months are eligible for a 100% exemption from business rates. This is designed to give property owners a grace period to find new tenants or buyers for their properties.
Additionally, properties that are being refurbished or undergoing major repair work may qualify for a temporary exemption from business rates. The length of the exemption period will depend on the nature and extent of the works being carried out.
In some cases, property owners may be able to apply for hardship relief if they are struggling to pay their void business rates. Local authorities have the discretion to grant relief in cases where paying the full rates would cause undue financial hardship to the property owner.
Challenges for Property Owners
While exemptions and reliefs are available, navigating the complex world of void business rates can be challenging for property owners. It can be difficult to determine whether a property qualifies for an exemption or relief, and the process of applying for relief can be time-consuming and bureaucratic.
In addition, property owners may find it difficult to attract new tenants or buyers for their empty properties while still being liable for void business rates. This can create a vicious cycle where the property remains empty, leading to further financial strain on the owner.
Impact on the Property Market
Void business rates can also have a broader impact on the property market. High rates of void business rates can lead to an increase in the number of empty properties, which can have a negative effect on the overall health of the property market.
Empty properties can attract vandalism, squatting, and other forms of anti-social behavior, which can further deter potential tenants or buyers. This can create a downward spiral where empty properties remain vacant for extended periods of time, leading to blight in the local area.
Finding a Solution
Given the challenges posed by void business rates, property owners may be wondering how they can navigate this complex issue. One potential solution is to work with a professional property management company that specializes in helping property owners navigate the world of business rates.
A property management company can help property owners determine whether their property qualifies for any exemptions or reliefs and assist with the application process. They can also help property owners attract new tenants or buyers for their empty properties, reducing the financial burden of void business rates.
In conclusion, void business rates can be a significant financial burden for property owners, especially if their property remains empty for an extended period of time. However, there are exemptions and reliefs available to help property owners navigate this complex issue. By working with a professional property management company, property owners can find solutions to reduce the impact of void business rates on their bottom line.