Empty commercial property business rates: your guide

Understanding empty rates relief is crucial if you own or manage unoccupied commercial property in the UK. Vacant properties can still incur business rates liability, but various relief schemes may significantly reduce or eliminate these costs. Whether you're a landlord with a vacant property, exploring exemptions for specific property types such as a charity, or trying to understand the timelines and conditions that trigger business rates relief, this guide explains everything you need to know about navigating empty unoccupied property rates.

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Do you pay business rates on a vacanct property?

Unoccupied property business rates: common scenarios

If you have a vacant property, you need to understand applicable business rates outcomes. The following common scenarios can help you understand how unoccupied property rules work and when it might be time to either appeal your rates or seek relief.

• Vacant office block: It’s important to register a change in occupancy immediately to avoid charges. Not doing so could result in full business rates until relief applies.
• Empty retail property between tenancies: While relief might be available in this circumstance, it could revert back to full business rates if the commercial property is adapted for new use without reoccupation.
• Partially occupied warehouse: Business rates can be apportioned if a commercial property is partially vacant. It’s important to challenge the assessed rateable value in order to reduce the overall bill.
• Long-term unoccupied industrial unit: Depending on the rules and reliefs available, extended unoccupied industrial space can trigger higher rate charges. Strategic planning and timely relief claims can prevent unnecessary costs.
   

Empty commercial property rates: when they apply and what they cost

What business rates you pay on an empty commercial property and when vary; here's a quick guide

Business rates on empty commercial property are still due, in most instances, even when they are empty. In the UK, you must pay business rates on empty commercial property after a short relief period:

• First 3 months: No business rates for most properties.
• First 6 months: No business rates for industrial/warehouse properties. Following these business rates relief periods, full business rates apply, even if the property is vacant.

How to avoid business rates on an empty property

Can I avoid paying business rates on a vacant property?

It’s important to ensure you are always paying the appropriate business rates for your commercial property, whether vacant or occupied. While there are exemptions for certain specialist empty properties, while they are vacant, most properties, after the set rate relief period, are required to pay.

Not doing so means the appropriate council can take legal action to ensure payment is made.

Empty storage unit: are rates still payable?

Do I have to pay business rates on a storage unit?

Even though a storage unit is empty, it is still commercial property and is therefore eligible for Business Rates. The empty relief rate is slightly longer than other property types, but after 6-months of the property being vacant, standard rates are due.

Empty property rate exemptions

Empty property rate exemptions

Empty property rate exemptions vary by property type:

1. Most commercial properties: 3 months exempt before full rates apply.
2. Industrial properties: up to 6 months exempt before full rates apply.
3. Buildings used for charitable purposes: may qualify for up to 80% relief on business rates. Local councils can provide additional discretionary relief to reduce rates even further. If you're a charity or local sports club, contact your local council to discuss eligibility requirements and available support specific to your situation. And for larger charitable organisations with multiple properties, consider consulting business rates specialists who can provide tailored strategies aligned with organisational goals and property portfolio.
4. Listed buildings: exempt until re-occupied. This exemption will automatically be applied by some councils however it is best to contact the local relevant council.
5. Rural properties: Rural Rate Relief is relief of up to 100% off business rates for small rural businesses (like village shops, post offices, pubs) in areas with a population under 3,000. Rural Rate Relief is important because it helps sustain essential services and businesses in small rural communities where margins are often tight and customer bases are limited.

Strategies you can implement to manage business rates on vacant commercial property

Strategies for managing business rates on vacant commercial property

If your property is vacant or unoccupied you have options for managing business rates. Beyond available relief, owners and occupiers should consider practical strategies for managing business rates while the property remains empty:

• Short-term occupancy: Temporary or partial occupancy can reset empty property relief periods.
• Property alterations or reconfigurations: Changing the property’s size, layout, or use could affect assessment on business rates.
• Apportionment for partially vacant properties: There is the potential for split rates for a property if only a part of it is unoccupied.
• Timing: Coordinating vacancy periods with revaluation cycles or lease renewal can influence future rates liability.

If you’re unsure about empty rate relief for your property, getting expert advice early from your local council or a business rates specialists can save you time and future legal challenges. The Government website has useful guidance on property types, exemptions and appeal processes and our Business Rates Experts can support you with more complex properties including healthcare centres, educational facilities and science and technology parks. And, in cases where properties are partially occupied or undergoing refurbishment works.