As a landlord, you may be aware of the various expenses and taxes that come with owning a rental property. One of these expenses is business rates, which are taxes levied on non-domestic properties like shops, offices, and rental properties. However, there are some relief schemes available to help landlords reduce the amount they have to pay. In this article, we will discuss everything you need to know about landlord business rates relief.
What are Business Rates?
Business rates are taxes paid on non-residential properties in the UK. They are calculated based on the rateable value of the property, which is assessed by the Valuation Office Agency (VOA). The rates are set by the government and local authorities use them to fund local services. Landlords are responsible for paying business rates on their rental properties, unless the tenants have agreed to pay them as part of the lease agreement.
Types of landlord business rates relief
There are several relief schemes available to help landlords reduce their business rates bill. The main ones include small business rate relief, empty property relief, and rural rate relief.
1. Small Business Rate Relief
Small business rate relief is available to landlords who only own one property with a rateable value of less than £15,000. If you qualify for this relief, you may not have to pay any business rates at all. If your property has a rateable value between £12,000 and £15,000, you will receive tapered relief. This relief can significantly reduce the financial burden on small landlords.
2. Empty Property Relief
If your property is empty, you may be able to get empty property relief on your business rates. This relief can apply for the first three or six months that your property is empty, depending on the type of property. After this period, you may have to pay full business rates again unless the property qualifies for another relief scheme.
3. Rural Rate Relief
Rural rate relief is available to landlords who own properties in designated rural areas. If you meet the criteria, you could get 50% off your business rates bill. This relief aims to support businesses in rural communities and reduce the financial burden on landlords in these areas.
Applying for landlord business rates relief
To apply for business rates relief as a landlord, you will need to contact your local council. They will be able to provide you with the necessary forms and guidance on how to apply. Make sure you have all the relevant information about your property and tenancy agreements ready when you apply. The process may vary depending on the relief scheme you are applying for, so it is essential to follow the council’s instructions carefully.
Benefits of landlord business rates relief
There are several benefits to getting business rates relief as a landlord. Firstly, it can help reduce the financial burden on your rental property, especially if you are a small landlord with limited resources. This relief can free up cash flow that can be reinvested back into the property or used for other business purposes. Additionally, getting relief can make your property more attractive to potential tenants, as they may be more inclined to rent a property with lower outgoings.
Challenges of Landlord Business Rates Relief
While business rates relief can provide significant financial benefits to landlords, there are some challenges to consider. For example, you may need to meet specific criteria to qualify for relief, which can be time-consuming and complicated. Additionally, some relief schemes have strict deadlines or limited availability, so it is essential to stay informed and apply for relief as soon as possible. Finally, getting relief may not eliminate the need to pay business rates entirely, so you should still budget for this expense accordingly.
In conclusion, landlord business rates relief can be a valuable resource for reducing the financial burden on your rental property. By understanding the different relief schemes available and how to apply for them, you can take advantage of these opportunities to save money and improve your property’s profitability. Remember to stay informed, meet the criteria, and apply for relief promptly to reap the benefits of these schemes.