Case Study – Business Rate Mitigation
Business Rate Mitigation – Empty commercial property is subject to costly business rates and greater risks from squatters. Property Guardians can help change the classification of a property from commercial to residential, which can help save you a huge amount of money on business rates, provide greater legal protection from squatters, and reduce standard security expenses.
Our results of Property Guardianship speak for themselves. Here’s just one example:
- Cost to Property Owner: ZERO
- Property Owner Business Rate Saving: £79,602.55 PA
- Security Service Provided: Property Guardians
Our client came to us with a large office block located in Cheltenham, the property was up for demolition and redevelopment, but was going to be left vacant for a minimum of 6 to 12 months.
In addition to being vulnerable to the risk of squatters, vandalism and maintenance issues, our client was paying a total of £90,000 per year, or £7500 per month in business rates.
DEX went in and put together plans for fitting showers and kitchens within the property, decorating and making it habitable for residential use, at no cost to the Owner.
During the 10 working days required to bring the property to a habitable standard, one of DEX’s Guardian Managers, lined up potential Guardians and let them view the property to create the interest.
The whole office block was split into 7 self-contained units for council tax purposes, which works out as Band D.
As Guardians moved in, the Property Owner was able to submit the plans to the VOA and apply for business rate mitigation. The VOA then came back with an estimate for the council tax for the property.
As installations done by DEX (showers, kitchens, etc.) are all temporary, they can be removed at the end of the Guardianship. All of Guardians sign a licence to occupy, so hold no tenancy rights and the property will remain on a monthly rolling contract until the client is ready to redevelop the site.
Impact- Business Rate Mitigation And More
Our client reduced their council tax bill, paying a total of £10,397.45 per year, or £866.45 per month in council tax. Saving them £79,602.55 over the course of a year, or £6,633.55 per month.
As the law on squatting hasn’t changed for commercial property, if our client’s property was to get squatted, they would have had to go through a lengthy, and very costly court case to get them removed. By using both schemes, our client’s property was now classed as residential, meaning it was illegal for squatters to enter.
In addition to saving huge amounts of money on rates and having greater legal protection from squatters, our client also saved money on standard security costs.