empty rates commercial property, also known as business rates, can be a significant financial burden for property owners. When a commercial property is empty, the owner is still required to pay business rates to the local council. This can lead to considerable costs, especially if the property remains vacant for an extended period of time. In this article, we will explore what empty rates commercial property are, how they are calculated, and what property owners can do to mitigate their impact.
Empty rates commercial property are taxes that are levied on vacant commercial properties. The purpose of these rates is to incentivize property owners to put their spaces to productive use and discourage the hoarding of empty properties. However, these rates can often be a source of frustration for property owners, especially when they are already facing financial strain due to the property being vacant.
The calculation of empty rates commercial property can vary based on the location and size of the property. In general, the rateable value of the property is multiplied by the national non-domestic multiplier to determine the business rates that must be paid. The national non-domestic multiplier is set annually by the government and is used to calculate the rates payable on non-domestic properties.
The rateable value of a commercial property is determined by the Valuation Office Agency (VOA) and is based on factors such as the size, location, and usage of the property. The VOA assesses the property and assigns a rateable value, which is used as the basis for calculating the business rates.
Property owners can apply for certain exemptions or reliefs that may reduce the amount of empty rates commercial property that they are required to pay. For example, properties that are undergoing major refurbishment or repair may be eligible for a temporary exemption from business rates. Additionally, properties that are newly built or have recently become vacant may be entitled to a three-month exemption from empty rates.
Property owners can also appeal the rateable value assigned to their property by the VOA if they believe it is incorrect. This process can be complex and time-consuming, but it can result in a reduction in the amount of business rates that must be paid. Property owners who are considering appealing their rateable value should seek the advice of a professional valuer or tax advisor to ensure the best possible outcome.
There are also ways that property owners can actively mitigate the impact of empty rates commercial property on their finances. One option is to temporarily occupy the property with a short-term tenant or pop-up shop. This can generate some rental income and may make the property more attractive to potential long-term tenants.
Another option is to negotiate a break clause with the local council that allows the property owner to suspend or reduce the payment of business rates during periods of vacancy. This can provide some financial relief and may encourage property owners to invest in bringing tenants back into the property more quickly.
Property owners can also explore the possibility of converting the property for a different use that may be more in demand in the current market. For example, a vacant office building could be converted into residential apartments or a retail space. This can not only help to generate rental income but also make the property more attractive to potential tenants.
In conclusion, empty rates commercial property can be a significant financial burden for property owners, especially when a property remains vacant for an extended period of time. However, there are ways to mitigate the impact of business rates and potentially reduce the amount that must be paid. By understanding how empty rates commercial property are calculated and exploring options for exemptions, reliefs, and alternative uses, property owners can better navigate this challenging aspect of property ownership.