For commercial property owners, the cost of maintaining an empty property can be a significant financial burden. Apart from regular maintenance and security costs, one major expense that owners of empty commercial properties have to contend with is the rates payable on the property. These rates, also known as business rates or property taxes, are levied by local authorities on all non-residential properties, including empty commercial properties. Understanding how these rates are calculated and what options are available for reducing or managing them is essential for property owners looking to minimize their expenses.
The rates payable on empty commercial property are based on the rateable value of the property. The rateable value is an estimate of the property’s market rental value on a specific date, as assessed by the Valuation Office Agency (VOA) in England or the equivalent authorities in other parts of the UK. The rateable value is used as the basis for calculating the business rates that are due on the property.
For occupied commercial properties, the business rates are generally paid by the tenant as part of their lease agreement. However, for empty commercial properties, the responsibility for paying the rates falls on the property owner. The rates payable on empty commercial property are subject to certain exemptions and reliefs, but in most cases, owners are required to pay the full amount.
One common misconception is that owners of empty commercial properties do not have to pay any rates. This is not true. In fact, owners of empty commercial properties are still required to pay business rates, albeit at a reduced rate. Under current legislation, empty commercial properties with a rateable value of less than £2,900 are completely exempt from paying rates for the first three months that the property remains empty. After the initial three-month period, the property owner is required to pay the full rates, unless they qualify for any additional reliefs or exemptions.
For empty properties with a rateable value of £2,900 or higher, the rates payable are set at 50% of the full amount. This discount applies for the entire duration that the property remains empty, provided that it is not occupied or used for any purpose. This 50% discount is intended to encourage property owners to actively market their empty properties and bring them back into use, as it provides some financial relief while the property remains vacant.
In addition to the discount for empty properties, there are also other types of reliefs and exemptions that property owners may be eligible for. One common relief is the Small Business Rate Relief, which provides a discount on business rates for properties with a rateable value below a certain threshold. This relief is aimed at supporting small businesses and helping to reduce the financial burden of business rates on small commercial properties.
Another type of relief is the Retail Relief, which provides a discount on business rates for retail properties with a rateable value below a certain threshold. This relief is designed to support the retail sector, which has been facing significant challenges in recent years due to changing consumer behavior and increased competition from online retailers.
Property owners who are struggling to pay the rates on their empty commercial properties may also be able to negotiate a payment plan with their local authority. This can help to spread the cost of the rates over a longer period of time, making it more manageable for property owners who are facing financial difficulties.
Overall, understanding the rates payable on empty commercial property and the options available for reducing or managing these rates is essential for property owners looking to minimize their expenses and make their properties more attractive to potential tenants. By taking advantage of the discounts, reliefs, and payment options that are available, property owners can help to alleviate the financial burden of owning an empty commercial property and increase their chances of finding a new tenant for their property.