Empty rates exemption, also known as empty property relief, is a term that often confuses property owners. It is a scheme that provides relief from paying business rates on commercial properties that are empty for a certain period of time. In the United Kingdom, empty rates exemption can be a significant factor for many property owners, especially during times of economic downturn or when trying to attract new tenants.
In this article, we will delve into the details of empty rates exemption and provide a comprehensive guide for property owners who may be eligible for this relief.
What is empty rates exemption?
Empty rates exemption is a relief scheme that was introduced by the government to mitigate the financial burden on property owners who are unable to generate income from their commercial properties. Business rates are a tax levied on non-domestic properties in the UK, and they are usually paid by the occupier of the property. However, when a property becomes empty and unoccupied, the responsibility for paying the business rates falls back on the property owner.
Empty rates exemption allows property owners to claim relief from paying business rates on their empty properties for a certain period of time. The length of the exemption period varies depending on the type of property and its location. In general, properties are entitled to 100% relief for the first three months they are empty, followed by a 50% discount for the next three months. After six months of the property being empty, the owner must pay the full business rates unless they qualify for additional exemptions.
Who is Eligible for empty rates exemption?
Property owners who are eligible for empty rates exemption are typically those who are actively seeking to rent out or sell their property but have been unsuccessful in finding a tenant or buyer. To qualify for the exemption, the property must be genuinely empty and unoccupied. This means that the property cannot be used for any commercial purpose, even if it is temporarily vacant.
It is important to note that certain types of properties are not eligible for empty rates exemption, such as properties that are classed as industrial or warehouse spaces. Additionally, properties that are exempt from paying business rates altogether, such as agricultural buildings or buildings used for charitable purposes, are not eligible for empty rates exemption.
How to Apply for empty rates exemption?
To apply for empty rates exemption, property owners must contact their local council and provide evidence that the property is empty and actively being marketed for rent or sale. The council will then review the application and determine whether the property qualifies for relief.
In some cases, property owners may be required to provide additional information, such as details of their marketing efforts or proof of their efforts to find a tenant. It is important for property owners to keep detailed records of their activities related to the property, as this information may be requested by the council during the application process.
Benefits of Empty Rates Exemption
Empty rates exemption can provide significant financial relief for property owners, especially during periods of economic uncertainty or when the property market is sluggish. By allowing property owners to temporarily avoid paying business rates on their empty properties, the scheme can help to reduce the financial burden and incentivize property owners to actively seek new tenants or buyers.
Furthermore, empty rates exemption can make it easier for property owners to maintain and improve their properties while they are empty. By freeing up funds that would have otherwise been spent on business rates, property owners can invest in renovations, repairs, or marketing efforts to attract new tenants.
In conclusion, empty rates exemption is a valuable relief scheme for property owners in the UK who are struggling to find tenants or buyers for their commercial properties. By understanding the eligibility criteria and application process for empty rates exemption, property owners can take advantage of this scheme to alleviate financial burdens and attract new business opportunities.