How to avoid business rate increases is an important question that many homeowners are faced with at some point during their mortgage. Homeowners who purchase their home with the intent to either live there permanently or rent it out, may find that they are under the gun with their mortgage payment and looking for ways to decrease the payment. Luckily, if you know what to ask for in your negotiations, you stand a good chance of getting a better deal when refinancing. Before you even start looking for a new mortgage loan, you should be aware of how to avoid business rate increases in the future. Here are some tips to get you started:
First, understand that business rates are based on the assessment of land use over its entire life. When you acquire a property, it is not always the actual worth of the property that determines the amount of money that you will pay to the lender. Instead, the lenders rely on how you intend to use the property and whether or not you will maintain the building and premises for any purpose. For instance, if you intend to live in the property as an apartment or a house, you stand a better chance of receiving a lower business rate since you would be considered a non-domestic user and will be charged a much higher rate than domestic users.
Second, it is important to know your rights. If you have a good credit history and have been paying your mortgage on time, you will most likely receive a rate break. Banks and other lending institutions do not like to take a chance on people who may default on their loans or cause other financial problems for them in the future. As such, they often give incentives to regular, hard-working borrowers by giving them breaks on their rates. For instance, if you are in good standing with your bank, you stand a good chance of receiving a one-time rate reduction as you pay business rates over a certain period of time.
Another way to receive business rates relief is to actually rent out your vacant property to a tenant who will be able to maintain the premises. Landlords who do not want to see their property empty for too long often choose to rent out their empty properties to tenants who plan on maintaining the premises. These tenants, in turn, are more likely to pay their monthly rental fees on time and in full. In some cases, landlords even get to keep their vacancy if the tenant maintains the property at all times.
The third option that you have as a landlord is to actually ask the local council to raise your rateable values. The local council generally has the authority to increase property rates in certain circumstances including when there is an over-crowding problem or when the quality of the surrounding area improves. Before raising the rate, the local council requires the landlord to submit proof that the increase is justified based on the above-mentioned circumstances. This option is usually the best one for those landlords who have not received all of the above-mentioned relief options.
The last option that is open to you as a landlord is to apply for a special rating list relief. A special rating list relief allows you to apply a different premium rate to your vacant land than the standard rate in force at the time. You can request that you receive a ten per cent discount on your business rates if you were to use the special rating list relief. This type of relief is only available in certain circumstances and it is important that you discuss this with your local cabinet as you do so.