empty residential property rates relief, also known as the vacant building credit, is a topic that is gaining attention in the real estate world. This relief allows property owners to receive a reduction in business rates for their residential properties that are empty for a certain period of time. It is an incentive provided by the government to encourage property owners to bring their vacant properties back into use quickly.
The concept of empty residential property rates relief was introduced as a means to tackle the issue of high numbers of empty properties in the UK. These empty properties not only contribute to urban blight and reduce the overall quality of life in a neighborhood but also result in lost revenue for local authorities. By providing relief on business rates for empty residential properties, the government aims to incentivize property owners to either sell or rent out their properties more quickly, thereby bringing these properties back into productive use.
The relief is available to property owners who have a residential property that has been empty for at least three months. Property owners can apply for this relief through their local council, and if approved, they will receive a 100% reduction in business rates for the first three months that the property remains empty. After the initial three-month period, the relief reduces to a 50% reduction in business rates for a further three months. The relief then decreases to a 10% reduction for the following nine months.
The empty residential property rates relief is a time-limited incentive, with the total relief period being 18 months from the date the property becomes empty. Once the 18-month period is over, the property owner is required to pay the full business rates for the property, unless they can qualify for another form of relief, such as small business rates relief.
It is important to note that the empty residential property rates relief is only applicable to properties that are genuinely empty. Properties that are being used for storage purposes or undergoing renovations or repairs do not qualify for this relief. Additionally, properties that are exempt from business rates, such as listed buildings or properties owned by charities, are also not eligible for this relief.
While the empty residential property rates relief provides a financial incentive for property owners to bring their vacant properties back into use, it has also come under criticism from some quarters. Critics argue that the relief can sometimes inadvertently incentivize property owners to keep their properties empty for longer periods in order to benefit from the reduction in business rates. This can lead to properties being left vacant for extended periods, which can have negative effects on the surrounding community.
In response to these concerns, the government has made changes to the empty residential property rates relief in recent years to address some of these issues. For example, in 2017, the government introduced a new restriction that limits the relief to properties that have a rateable value of less than £2,900. This was done in an effort to target the relief towards smaller properties and prevent property owners of larger, more valuable properties from benefitting excessively from the relief.
Another criticism of the empty residential property rates relief is that it does not necessarily incentivize property owners to bring their properties back into use in a way that benefits the community. For example, some property owners may choose to convert their properties into short-term rentals or Airbnb accommodations in order to profit from the relief, rather than converting them into affordable long-term housing for local residents.
Despite these criticisms, the empty residential property rates relief continues to be an important tool in incentivizing property owners to bring their vacant properties back into use. By providing a financial incentive to property owners, the relief helps to reduce the number of empty properties in the UK, which in turn can have positive effects on urban regeneration, housing affordability, and community wellbeing.
In conclusion, empty residential property rates relief is a valuable tool that can help to address the issue of vacant properties in the UK. By providing a reduction in business rates for properties that are empty for a certain period of time, the relief incentivizes property owners to bring their properties back into productive use more quickly. While the relief is not without its criticisms, it remains an important mechanism for encouraging property owners to make productive use of their vacant properties and contribute to the overall improvement of the built environment.