Financial Benefits for Landlords Supporting Charities
Why Supporting Charities With Vacant Commercial Space Is Good Business
Offering office and retail space to charities and good causes need not be just an altruistic gesture; it can also be a savvy financial strategy for commercial landlords. Empty commercial properties often represent unwelcome additional costs, including an ongoing liability for business rates, which quickly add up.
However, by partnering with a charity, good cause, or community group landlords with empty space can unlock a range of financial benefits that ease these pressures. The primary benefit of arranging a short-term tenancy with a deserving cause is reduced business rates for landlords. Other benefits include a reduction in security risk and associated costs. A building in use, even temporarily, is also proven to be easier to find long-term tenants for, often at a higher rental figure.
ASTOP specialises in helping landlords make the most of these opportunities. We offer expert guidance tailored to individual needs.
Financial Benefits for Landlords Partnering with Charities
Charities, good causes and community groups present landlords with potential advantages including everything from cutting overheads to improving asset performance. By understanding the core benefits of these partnerships, landlords can enhance their portfolios and convert unused space into more valuable financial assets.
The following sections outline the main financial gains landlords can expect when offering properties to charities and good causes for short-term leases.
Business Rates Reduction
When a property sits empty, landlords are often responsible for paying the full business rates after a short exemption period. Landlords can ethically sidestep these costs by renting to a charity, even on a short-term or rent-free basis. In the UK, when a registered charity or community group occupies a property, it may be eligible for up to 80% mandatory business rate relief, with many local councils granting the remaining 20% as discretionary relief. This charity tenants’ business rates relief means landlords can substantially reduce, or even eliminate, their business rates liability.
Additional Local Government Support
Many local authorities encourage partnerships between landlords and charities to reduce urban deterioration, antisocial behaviour, and the risk of crime associated with vacancies. They are also keen to support community development and cohesion. This motivation means local governments may also offer grants or incentives above and beyond business rates relief for landlords who make their properties available for charitable use. These schemes ease the financial burden on landlords and help revitalise areas through consistent property use. ASTOP works closely with local councils to ensure landlords can access all available support.
Lower Maintenance and Security Costs
Occupied buildings are generally better maintained. Charities often take good care of the premises they use because they value the opportunity, and a well-kept, functional space helps them serve the populations they support.
Day-to-day occupation reduces the likelihood of general deterioration, vandalism, and squatting, all of which can lead to significant out-of-pocket expenses for the landlord. The need for security patrols and measures, such as CCTV, is significantly reduced, if not negated altogether. Keeping the space active also means monitoring utilities and regularly checking fire and alarm systems. In practical terms, short-term tenancy lowers overall maintenance and security costs while preserving the asset’s condition.
Maintaining or Boosting Property Rental Value
When a property is occupied and in use, even through a temporary lease, it typically maintains its value. In fact, in some cases, a busy, active site can earn more for the landlord. Any building in use by a valued charity creates a marketable atmosphere of utility. Occupancy can attract future tenants who are reassured by the building’s upkeep and reputation. Vacant buildings, in comparison, can deteriorate rapidly and are less likely to appeal to prospective renters.
With charitable tenants, landlords are likely to avoid extended periods of emptiness, which is likely to maintain a competitive rental value. In some cases, keeping the space occupied may enhance its market value further.
Minimising Periods of Unoccupancy
Although not a direct financial benefit, businesses that demonstrate social responsibility and community engagement enjoy numerous advantages, including an enhanced reputation, compliance with Environmental, Social, and Governance (ESG) best practices, stronger investor relations, and more positive customer engagement.
Charitable tenancies of the type described in this blog offer property owners a credible way to enhance their public image, corporate responsibility profile, and community engagement activities.
A Legal and Ethical Way For Landlords To Benefit Financially
The savings available to landlords who rent to charities and good causes are fully supported by both local and national governments. The landlord property tax benefits promoted by ASTOP are a well-established, legal, and ethical way to reduce liability on vacant commercial properties. Such arrangements are encouraged as they promote community benefit and lead to responsible property use, as opposed to unethical tactics such as falsely registering properties as places of worship or ‘box shifting’ to imply false occupancy.
Partnering with a legitimate charity offers transparent and compliant financial benefits. Landlords can confidently take full advantage of these savings, knowing their actions are viewed as wholly above board and a positive contribution to social impact and local regeneration.
Helping Landlords Support Charities With Vacant Commercial Space
If you’re interested in saving money, including through tax incentives for landlords offering rent-free space to charities, ASTOP is a good place to start. We act as an intermediary, forming partnerships between landlords with empty buildings and vetted charitable and community organisations. We understand the needs of both parties and ensure any lease arrangement is mutually beneficial from the outset.
Every property is unique, and so is every charity. ASTOP provides tailored solutions for landlords, whether your goal is financial, reputational, or operational, we can build a plan.
Navigating charity partnerships and legal obligations doesn’t have to be complex or onerous. ASTOP simplifies the entire process. From matching you with the right charity to managing paperwork and compliance, we take care of the details, leaving you to make the most of this win-win scenario. Contact ASTOP’s Director, Shayelsh Patel, to learn more.
Explore More
If you are a landlord facing a period of unoccupancy, you can read more helpful blogs from ASTOP here. We have written more about the legal issues related to empty property, the financial impact of property vacancies, the role of local councils in ethical property management, and more.
We have also designed an infographic for commercial landlords to help set the scene.
