When it comes to owning commercial property, one of the biggest challenges faced by business owners is dealing with business rates on empty property. These rates can be a significant financial burden, especially for small business owners or those who are struggling to rent out their space. However, there are several strategies that can be employed to help mitigate the impact of business rates on empty property. In this article, we will discuss five key strategies that business owners can use to avoid or reduce their business rates on empty property.
1. Temporary occupation
One of the most effective ways to avoid business rates on empty property is to temporarily occupy the space yourself or allow others to use it on a short-term basis. By doing so, you can take advantage of the empty property rates relief scheme, which allows properties that are temporarily occupied to receive a 100% discount on business rates for up to three months. This can provide a significant financial reprieve for business owners who are struggling to find a long-term tenant for their space.
Additionally, temporary occupation can also help to deter squatters or vandals from targeting your property, as a visibly occupied space is less likely to attract unwanted attention. This can help to protect your property from damage and maintain its overall value in the long run.
2. Renovation and refurbishment
Another effective strategy for avoiding business rates on empty property is to invest in renovations or refurbishments to make the space more attractive to potential tenants. By improving the condition and appearance of the property, you can increase its desirability and make it more likely to be rented out quickly. In many cases, properties that are undergoing renovation or refurbishment may also qualify for a reduction in business rates, as they are considered to be in a state of disrepair and may not be eligible for the full rate.
Furthermore, investing in renovations and refurbishments can help to increase the value of your property in the long term, making it a more attractive asset for potential tenants or buyers. This can help to offset the costs of business rates on empty property and ensure that your investment remains profitable over time.
3. Charity or community use
Another way to avoid business rates on empty property is to allow charitable or community organizations to use the space for free or at a reduced rate. In the UK, properties that are used for charitable purposes or by community organizations may be eligible for relief on business rates, depending on the specific circumstances. By opening up your space to these types of organizations, you can not only help to support valuable causes but also benefit from a reduction in your business rates bill.
Additionally, allowing charitable or community use of your property can help to improve its public image and make it more attractive to potential tenants. By demonstrating a commitment to social responsibility and community engagement, you can enhance the appeal of your property and generate positive attention from both tenants and the wider community.
4. Splitting the property
If you own a large commercial property that is difficult to rent out in its entirety, consider splitting the space into smaller units that may be more attractive to tenants. By dividing the property into separate units, you can increase the likelihood of finding tenants for each individual space and reduce the overall impact of business rates on empty property. This can help to generate a more stable income stream and maximize the potential for rental revenue.
Additionally, splitting the property into smaller units can also make it more versatile and adaptable to the changing needs of tenants. By offering a range of different spaces and configurations, you can appeal to a wider range of potential tenants and increase the overall occupancy rate of your property.