Empty property relief and the business rates reliefs commercial landlords leave unclaimed
When a commercial unit is empty, the business rates fall on the owner. The relief for empty property is shorter than most landlords assume, the period needed to reset it more than doubled in 2024, and several reliefs have to be asked for. Here are five places in England where landlords pay rates they need not, with an illustrative calculation at the 2026/27 multipliers.
Why an empty unit becomes the owner's bill
While a commercial property is let and occupied, the tenant pays the business rates. When it falls empty, the liability passes to the owner, meaning the person entitled to possession, which is normally the landlord. For a landlord with a void, the rates bill is often the largest cost of the empty period after the lost rent itself, and the 2026 revaluation and new multipliers have changed the figures. What follows applies in England. Wales and Scotland have their own rules.
One: the relief is three months, or six, and then full rates
Empty property relief removes business rates for three months from the date the property becomes empty. Industrial premises, such as warehouses, get a further three months, six in total. After that, full rates are due. Some properties stay free of empty rates until they are occupied again: listed buildings, properties with a rateable value under GBP 2,900, properties owned by a charity where the next use will be mostly for charitable purposes, and community amateur sports club buildings where the next use will be mostly as a sports club. The common mistake is to assume a longer relief, or to miss that a listed building qualifies indefinitely and keep paying on one.
Two: the thirteen week reset
A fresh period of relief begins only after the property has been occupied for long enough. From 1 April 2024, regulations extended that period in England from six weeks to thirteen. A tenant who occupies for less than thirteen weeks and then leaves does not start a new relief period, so the owner becomes liable for full rates from the day the property empties again. This matters when agreeing a short letting or the timing of a break, because the cost of the following void depends on it.
Three: a building that cannot be used is not merely empty
A property stripped out for major works may be incapable of use at all, which is a different position from being empty. Owners should tell the Valuation Office through their business rates valuation account. If the Valuation Office decides that the property cannot be used, no business rates are payable until it can be used again. Landlords carrying out a substantial refurbishment often pay empty rates throughout because nobody told the Valuation Office that the works had begun.
Four: part of a building empty
Where only part of a property is unoccupied for a short time, the council may give relief on the empty part, from the day it became empty. It is discretionary, it varies between councils, and it has to be asked for. The relief goes to whoever is liable for the rates, so a tenant who has stopped using two floors of five should ask the council rather than assume that nothing can be done, and a landlord with a struggling tenant can point them to it.
Five: the reliefs that belong to the tenant, and still matter to you
Rates that a tenant cannot afford tend to become a void. Small business rate relief gives 100 per cent relief to an occupier whose only property has a rateable value of GBP 12,000 or less, tapering to nothing at GBP 15,000. An occupier who takes a second property on or after 27 November 2025 keeps relief on the first for 36 months, against twelve before that date. For 2026/27, properties with a rateable value below GBP 51,000 use the small business multiplier of 43.2p, even without relief, against the standard 48p, and qualifying retail, hospitality and leisure occupiers of smaller properties use 38.2p. Occupiers who lost relief because of the 1 April 2026 revaluation may get supporting small business relief, which limits the increase in their bill to the greater of GBP 800 and a percentage cap of 5, 15 or 30 per cent depending on rateable value. Transitional relief also caps increases from the revaluation, at the same percentages for 2026/27, and is applied automatically. A prospective tenant who does not know what their bill will be is a tenant who may not sign.
An illustrative calculation
The figures are illustrative. A warehouse with a rateable value of GBP 40,000 falls empty on 1 May 2026. At the small business multiplier of 43.2p, the full annual bill is GBP 17,280, or GBP 1,440 a month. As industrial premises it is free of rates for six months, worth GBP 8,640. From 1 November 2026 the owner pays GBP 1,440 a month. Suppose a tenant then takes it from 1 January 2027 for ten weeks and leaves. Because ten weeks is less than thirteen, no new relief period begins, and the owner is liable again from the day the tenant leaves. Had the occupation lasted thirteen weeks, a fresh six months of relief would have followed. Empty rates a landlord pays are an expense of the property business, so they reduce taxable rental profit, but relief at the landlord's tax rate is only a fraction of the cash cost.
What to do with each void
Tell the council the date the property became empty, in writing, and check that the next bill shows the relief. Diary the date it ends. If the building is listed or has a rateable value under GBP 2,900, confirm that relief continues until it is occupied. Before major works start, tell the Valuation Office. If part of a building is empty, ask the council about relief on that part. Before agreeing a short letting, check whether it will last thirteen weeks. And when marketing a unit, find out what a small occupier would actually pay after the reliefs. That figure, more than the rent, decides how long the unit stays empty.
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This article is general information only and does not constitute tax advice. Figures and dates are current as at the date of writing; any worked example is illustrative. Always consult a qualified adviser before acting.