As a landlord, it’s essential to understand the various costs and taxes associated with owning a property. One significant expense that landlords must consider is business rates. Business rates are taxes that businesses, including landlords, must pay on non-domestic properties.
However, there are several relief schemes and exemptions available to help landlords reduce their business rates burden. In this article, we will discuss everything you need to know about landlord business rates relief.
One of the most common forms of relief for landlords is Small Business Rate Relief (SBRR). SBRR is available to businesses that occupy only one property and have a rateable value below a certain threshold. In England, this threshold is £15,000, while in Wales and Scotland, it varies slightly. Landlords who qualify for SBRR are eligible for a significant reduction in their business rates bill or complete relief, depending on their rateable value.
Another relief scheme that landlords can benefit from is Retail Rate Relief. This relief is specifically targeted at retail properties such as shops, restaurants, and pubs. Properties that meet the criteria for Retail Rate Relief can receive a discount on their business rates bill of up to one-third. This relief aims to support high street businesses and landlords who own retail properties.
Furthermore, there are also specific relief schemes available for properties with charitable use. If a property is used for charitable purposes, such as a community centre or a charity shop, it may qualify for mandatory relief of 80% on its business rates. Additionally, discretionary relief may be available for properties that do not meet all the criteria for mandatory relief but still have a charitable purpose.
For landlords who own empty properties, Empty Property Rate Relief can provide some welcome relief on business rates. Normally, landlords are required to pay 100% of their business rates on empty properties after a certain period. However, there are exemptions and reliefs available depending on the circumstances. For instance, newly built properties may be exempt from empty property rates for a specified period to allow landlords time to find tenants.
In addition to these relief schemes, landlords may also benefit from Transitional Relief. Transitional Relief helps businesses, including landlords, manage the impact of changes in the rateable value of their property. When there is a significant increase in the rateable value, transitional relief allows landlords to phase in the full increase over several years instead of facing a sudden and substantial rise in their business rates bill.
It’s essential for landlords to be aware of the relief schemes available to them and take advantage of any opportunities to reduce their business rates burden. By exploring these options and understanding the criteria for eligibility, landlords can potentially save a significant amount of money on their business rates bills.
However, it’s crucial to note that the rules and regulations surrounding landlord business rates relief can be complex and subject to change. Therefore, landlords should seek professional advice from a qualified accountant or tax advisor to ensure they are making full use of all available relief schemes and exemptions.
In conclusion, landlord business rates relief offers various opportunities for landlords to reduce their tax liabilities and lower their overall costs. From Small Business Rate Relief to Empty Property Rate Relief, there are several schemes available to help landlords save money on their business rates bills. By understanding the eligibility criteria and seeking professional advice, landlords can take advantage of these relief schemes and ensure they are not paying more tax than necessary on their properties.
Overall, landlord business rates relief is a crucial aspect of managing a property portfolio and should not be overlooked by landlords seeking to maximize their profits and minimize their expenses.