Empty Property Business Rates: Exemptions, Reliefs & Avoiding Unoccupied Rates

If you own or manage commercial property in the UK, unoccupied buildings can quickly become a significant financial drain. Under UK rating rules, once a property becomes empty, you are temporarily exempt from business rates. However, once this initial rate-free period expires, you must pay full business rates at 100% of the normal rate. In this comprehensive guide, we explain the rules for empty property business rates, outline statutory exemptions, detail how long a property can remain empty before rates apply, and provide legal mitigation strategies.

The Empty Property Rate-Free Periods

When a commercial property first becomes vacant, the owner or tenant is exempt from business rates for a set period. Under HMRC rules, this rate-free period is:

• 3 Months: For standard commercial properties (such as retail shops and offices).
• 6 Months: For industrial properties (such as factories, warehouses, and manufacturing plants).

If the property remains empty after this period, the owner must pay 100% of the standard business rates. To calculate these rates, use our Business Rates Calculator and model investment write-offs with our Property Capital Gains Calculator.

Statutory Empty Property Exemptions

Certain classes of commercial property are completely exempt from unoccupied business rates, even after the 3 or 6-month periods expire:

• Low Rateable Value: Properties with a Rateable Value of less than £2,900 are completely exempt from empty rates.
• Listed Buildings: Historic properties that are Grade I, II, or II* listed are exempt from unoccupied business rates indefinitely.
• Charities and Community Clubs: Empty properties owned by registered charities or Community Amateur Sports Clubs (CASCs) are exempt, provided the property’s next use is intended for charitable purposes.
• Legal Restrictions: Properties that cannot be occupied by law (or where occupation is prohibited by public action) are exempt.

Legal Empty Rates Mitigation Strategies

Commercial landlords use several legal strategies to minimize unoccupied business rates:

• The 6-Week Occupation Rule (Resetting the Clock): If an empty property is re-occupied for at least 6 weeks, it qualifies for a fresh 3 or 6-month rate-free period when it becomes vacant again. This is often done by letting the space to pop-up shops, art exhibitions, or storage companies. (Note: Under new rules, the government is increasing this required occupation period to 13 weeks in England from 2024/25).
• Charity Letting: Leasing the property to a registered charity for storage or office use allows you to claim 80% to 100% charitable rates relief.
• Demolition or Redevelopment: If a property is undergoing major structural redevelopment or is in such poor condition that it cannot be occupied without major repair, you can apply to the VOA to have the property removed from the rating list entirely.

References & Official Sources

This guide is formulated in accordance with the following official tax guidelines:

• Non-Domestic Rating (Unoccupied Property) (England) Regulations 2008: Statutory instrument governing rates on empty properties.
• Local Government Finance Act 1988: Section 45 (rules governing unoccupied properties).
• HMRC Business Rates Manual: Guidelines for unoccupied property exemptions and rating lists.

Frequently Asked Questions: Empty Property Rates

Q: How long can a commercial property be empty before paying rates?
A: Shops and offices are exempt for 3 months, and industrial warehouses are exempt for 6 months. After this, 100% of the business rates bill is due.

Q: Do listed buildings pay empty business rates?
A: No. Grade I, II, and II* listed commercial buildings are completely exempt from paying empty business rates indefinitely.

Q: What is the rateable value limit for empty property rates exemption?
A: Properties with a Rateable Value of less than £2,900 are exempt from paying empty rates. This threshold is assessed on the property’s current VOA valuation.