Empty premises rates relief, also known as empty property relief, is a valuable tax break for property owners who find themselves with vacant commercial properties. With the ongoing economic uncertainty and the impact of the COVID-19 pandemic, many businesses have had to shut their doors, leaving behind empty buildings that are costing their owners money in business rates. Empty premises rates relief offers a reprieve in the form of a tax exemption for certain types of empty properties, but navigating the rules and regulations can be a daunting task for property owners.
In this guide, we will break down the basics of empty premises rates relief and provide tips for property owners looking to take advantage of this tax break.
What is empty premises rates relief?
Empty premises rates relief is a tax break offered by local councils to property owners who have commercial properties that are unoccupied. In the UK, business rates are a tax on non-residential property that is used for business purposes. However, if a property is empty, the owner may be eligible for rates relief for a certain period of time.
The rules for empty premises rates relief vary depending on the location of the property and the type of property in question. In England, for example, commercial properties are eligible for 100% rates relief for the first three months they are empty, followed by a further 50% relief for the next three months. After the initial six-month period, the property owner is required to pay the full business rates unless the property falls under certain exemptions.
Exemptions to empty premises rates relief
While empty premises rates relief can provide much-needed financial relief to property owners, there are certain exemptions that may prevent a property from qualifying for the tax break. Properties that are exempt from empty premises rates relief include:
– Properties with a rateable value of less than £2,900 in England and £2,600 in Wales
– Listed buildings
– Properties that are in use for certain purposes, such as agricultural or industrial use
– Properties that are undergoing repairs or structural alterations
– Properties that are legally prohibited from being used for business purposes
In addition to these exemptions, it is important for property owners to be aware of the specific rules and regulations in their local area, as they may vary from one council to another.
Tips for Property Owners
For property owners looking to take advantage of empty premises rates relief, there are a few key tips to keep in mind:
1. Keep detailed records: In order to qualify for empty premises rates relief, property owners must be able to provide evidence that their property is vacant. Keeping detailed records of the property’s occupancy status, as well as any repairs or maintenance work being carried out, can help to support a claim for rates relief.
2. Stay informed: The rules and regulations surrounding empty premises rates relief can be complex and subject to change. Property owners should stay informed about the latest updates and changes to ensure that they are maximizing their tax savings.
3. Consider alternative uses: If a property is struggling to attract tenants, property owners may want to consider alternative uses for the space in order to qualify for rates relief. For example, converting a vacant retail space into a pop-up gallery or event space could make the property eligible for relief.
4. Seek professional advice: Navigating the world of empty premises rates relief can be challenging, especially for property owners who are not familiar with the tax system. Seeking professional advice from a tax advisor or property consultant can help to ensure that property owners are making the most of this valuable tax break.
In conclusion, empty premises rates relief can be a lifeline for property owners with vacant commercial properties. By understanding the rules and regulations surrounding this tax break, keeping detailed records, and seeking professional advice when needed, property owners can maximize their tax savings and make the most of this valuable financial benefit.