For commercial property owners, there are a variety of costs to consider beyond simply purchasing the property itself. One of the often-overlooked expenses is the rates payable on empty commercial property. These rates can add up quickly and significantly impact a property owner’s bottom line. In this article, we will delve into what rates payable on empty commercial property are, how they are calculated, and what property owners can do to mitigate these costs.
First and foremost, it is important to understand what rates payable on empty commercial property actually are. Business rates, also known as non-domestic rates, are taxes that are levied on commercial properties in the UK. These rates are set by the government and are used to fund local services such as roads, schools, and emergency services. The amount of rates payable on a commercial property is calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA).
When a commercial property is empty, property owners are still required to pay rates on the property. This is known as rates payable on empty commercial property. The idea behind this is to prevent property owners from leaving their properties vacant for extended periods of time as a way to avoid paying rates. However, this can pose a significant financial burden on property owners, especially when the property remains empty for an extended period of time.
The rates payable on empty commercial property are typically set at 100% of the normal business rates for the property. In some cases, local authorities may offer a temporary relief period where property owners are given a discount on the rates payable for a set period of time. However, these relief periods are usually limited and come with certain eligibility criteria.
Property owners should also be aware that rates payable on empty commercial property are not exempt from other charges such as service charges, insurance, and maintenance costs. This means that even when a property is empty, property owners are still responsible for ensuring that the property is properly maintained and for covering any additional costs associated with the property.
So, what can property owners do to mitigate the impact of rates payable on empty commercial property? One option is to explore the possibility of appealing the rateable value of the property with the VOA. If property owners believe that the rateable value of their property is inaccurate or outdated, they can request a revaluation of the property. If the rateable value is reduced as a result of the appeal, property owners may be able to pay lower rates on the property.
Another option for property owners is to explore the possibility of letting out the property on a short-term basis. By finding a temporary tenant for the property, property owners may be able to avoid paying the full rates payable on the property. This can be a particularly effective strategy for property owners who are struggling to find a long-term tenant for their property.
Property owners can also consider applying for any available rate relief schemes that may be offered by their local authority. Some local authorities offer relief schemes for certain types of properties or for properties that have been empty for a certain period of time. By taking advantage of these relief schemes, property owners may be able to reduce the amount of rates payable on their empty commercial property.
In conclusion, rates payable on empty commercial property can be a significant financial burden for property owners. Understanding how these rates are calculated, exploring options for appealing rateable values, and taking advantage of any available relief schemes can help property owners mitigate the impact of these costs. By being proactive and exploring different strategies for reducing rates payable on empty commercial property, property owners can better manage their expenses and protect their investment in commercial property.