Empty Property Business Rates: Rules and Void Costs

Business rates are one of the biggest carrying costs of a vacant commercial property. This is where a landlord is directly liable, so it is worth understanding the rules before a lease ends.

The rate-free window

When a commercial property becomes empty there is a rate-free period:

• Three months for most commercial property (shops, offices).
• Six months for industrial and warehouse property.

After that window, full business rates become payable by the owner at the ordinary multiplier for the rateable value band. Empty property gets no Small Business Rate Relief and no retail, hospitality and leisure relief.

Exemptions

Some empty properties are exempt for the whole void:

• Rateable value below 2,900: exempt until reoccupied.
• Listed buildings: exempt while empty.
• Properties where occupation is prohibited by law, or which are held by a company in administration, in certain cases.

The reoccupation reset

To start a fresh rate-free period, the property must be genuinely reoccupied for at least 13 weeks (the rule since 1 April 2024, up from six weeks). This has curtailed the older strategy of short cycles of occupation to reset the clock. Aggressive mitigation schemes carry real risk and should be taken with professional advice.

Model your exposure

Our Business Rates Calculator has an empty-property mode: enter the rateable value, property type and expected void length and it works out your exposure month by month. You can offset some holding cost by letting the space for advertising hoardings or, on a genuine basis, to a charity.

How long is a commercial property rate-free when empty?

Three months for most commercial property, and six months for industrial and warehouse property. After that the owner pays full rates.

How do I reset the empty-rates window?

The property must be genuinely reoccupied for at least 13 weeks (the rule since 1 April 2024) to start a fresh rate-free period.

Sources

• Empty properties relief (gov.uk)