When it comes to owning commercial property, there are various costs that need to be taken into consideration. One of the expenses that property owners may often overlook is the rates payable on empty commercial property. These rates, also known as business rates, can add to the financial burden of maintaining an empty property. In this article, we will delve into what rates payable on empty commercial property entail and how they can impact property owners.
Business rates are a tax that is levied on non-domestic properties, including commercial properties. The rates payable on empty commercial property are a form of tax that property owners must pay to local authorities. These rates are calculated based on the rateable value of the property, which is assessed by the Valuation Office Agency (VOA). The rateable value is an estimate of the annual rental value of the property on a certain date, known as the valuation date.
In the United Kingdom, the rules regarding rates payable on empty commercial property can vary depending on the location of the property. In England, for example, empty commercial properties with a rateable value of less than £2,900 are exempt from business rates. However, properties with a rateable value above this threshold are subject to rates payable on empty commercial property. In Scotland, the rules are slightly different, with a 50% reduction in rates for vacant commercial properties for up to three months.
One of the main reasons why rates payable on empty commercial property can be a significant burden for property owners is the fact that they must be paid regardless of whether the property is occupied or not. This means that property owners are required to pay rates on empty commercial property even if it is undergoing renovations, awaiting a new tenant, or simply not being used. As a result, property owners may find themselves shouldering a considerable financial burden in addition to other expenses associated with maintaining a commercial property.
The rates payable on empty commercial property can also have an impact on property owners looking to sell their property. Prospective buyers may be deterred from purchasing a commercial property that is subject to rates payable on empty commercial property, as they will inherit the responsibility for these rates upon purchasing the property. This can make it challenging for property owners to sell their property in a timely manner and at a desirable price.
In some cases, property owners may be eligible for relief on rates payable on empty commercial property. One form of relief is the empty property rate relief, which provides a 100% exemption from rates payable on empty commercial property for a limited period of time. This relief is typically available for a maximum of three or six months, depending on the location of the property. Property owners can also apply for other forms of relief, such as hardship relief or charitable relief, if they meet certain criteria.
Despite the potential financial burden of rates payable on empty commercial property, property owners can take steps to minimize their impact. One option is to appeal the rateable value of the property if they believe it has been assessed incorrectly by the VOA. Property owners can also explore other forms of relief or exemptions that may be available to them. Additionally, property owners can consider leasing or subletting the property to generate income and reduce the financial burden of rates payable on empty commercial property.
In conclusion, rates payable on empty commercial property are an important consideration for property owners. These rates can add to the financial burden of maintaining a commercial property, especially if it remains vacant for an extended period of time. Property owners should be aware of the rules and regulations regarding rates payable on empty commercial property in their area and explore options for relief or exemptions to minimize their impact. By taking proactive steps, property owners can navigate the challenges associated with rates payable on empty commercial property and protect their financial interests.