When it comes to owning commercial property, there are many costs to consider beyond just the initial purchase price. One of the ongoing costs that property owners need to be aware of is the rates payable on empty commercial property. These rates, also known as business rates, can be a significant expense for property owners, especially if their property sits vacant for an extended period of time. In this article, we will explore what rates payable on empty commercial property are, how they are calculated, and some tips for reducing this cost.
First and foremost, it’s essential to understand what rates payable on empty commercial property actually are. Business rates are a tax that is levied on most non-domestic properties, including commercial properties such as shops, offices, and warehouses. These rates are based on the rental value of the property, which is determined by the local government. If a property is vacant, the ratepayer is still liable to pay rates on the property unless they are entitled to an exemption or relief.
The rates payable on empty commercial property can vary depending on where the property is located and its rateable value. In some cases, property owners may be entitled to a discount on their rates if their property has been empty for a certain period of time. However, this discount is usually only available for a limited time, after which the full rates will need to be paid.
Calculating the rates payable on empty commercial property can be a complex process. The rateable value of the property is determined by the Valuation Office Agency (VOA) in England, the Scottish Assessors in Scotland, and the Land and Property Services in Northern Ireland. This value is then used to calculate the rates payable based on the local government’s multiplier, which is set annually.
For property owners who are struggling to pay the rates on their empty commercial property, there are some options available to help reduce this cost. One option is to apply for hardship relief, which is available for property owners who are facing financial difficulties. This relief can provide a temporary reduction in rates or even a complete exemption for a certain period of time.
Another option is to consider letting out the property, even if it is only on a short-term basis. By doing so, property owners can avoid paying the full rates on the property and generate some income to offset the costs. However, it’s essential to be aware that letting out a property can also come with its own set of costs and responsibilities, so property owners should weigh the pros and cons carefully before making a decision.
Property owners may also be able to apply for empty property relief, which provides a 100% exemption from rates for a specified period of time. This relief is available for certain types of properties, such as industrial warehouses or listed buildings, and can provide a significant saving for property owners. However, it’s important to note that this relief is not automatic and needs to be applied for through the local government.
In conclusion, rates payable on empty commercial property can be a significant expense for property owners, but there are options available to help reduce this cost. By understanding how these rates are calculated and exploring the various relief options, property owners can take steps to manage this expense more effectively. Whether through applying for hardship relief, letting out the property, or applying for empty property relief, property owners can find ways to alleviate the financial burden of rates payable on empty commercial property.