When it comes to owning commercial property, there are a variety of costs that come into play. One of the expenses that many property owners may not be fully aware of is the rates payable on empty commercial property. These rates, also known as business rates, are a significant financial consideration for those who own and operate commercial properties. In this article, we will break down what rates payable on empty commercial property are, how they are calculated, and what property owners can do to minimize their impact.
rates payable on empty commercial property are taxes that property owners are required to pay on properties that are vacant or unoccupied. These rates are charged by local authorities in the UK and are based on the rental value of the property. The purpose of these rates is to encourage property owners to keep their properties occupied and to prevent empty buildings from becoming eyesores or havens for criminal activity.
The calculation of rates payable on empty commercial property can vary depending on the location and size of the property. In general, rates are calculated as a percentage of the rateable value of the property. The rateable value is an estimate of the yearly rental value of the property as determined by the Valuation Office Agency. The exact percentage rate can vary from one area to another, but it is typically around 50-60% of the rateable value.
For example, if a commercial property has a rateable value of £20,000, the rates payable on that property could be around £10,000-£12,000 per year. This is a significant amount of money for property owners to pay, especially if the property remains empty for an extended period of time.
So, what can property owners do to minimize the impact of rates payable on empty commercial property? One option is to appeal the rateable value of the property with the Valuation Office Agency. This process involves providing evidence to support a lower rateable value, which can result in lower rates payable. Property owners can also take steps to actively market the property for rent or sale, as keeping the property occupied is the most effective way to avoid paying empty property rates.
Another option for property owners is to apply for a rates relief or exemption. There are various relief schemes available for certain types of properties, such as small business rate relief or charitable rate relief. Property owners should research these schemes to see if they are eligible and apply for them to reduce their rates payable.
It is also important for property owners to be aware of the rules and regulations surrounding rates payable on empty commercial property. For example, there are certain time limits for how long a property can remain empty before rates become payable. In England, properties are exempt from rates for the first three months they are empty, but after that, rates are payable at the full rate. In Scotland and Wales, the time period before rates become payable may differ, so property owners should check with their local authority for specific guidelines.
Overall, rates payable on empty commercial property are a significant financial consideration for property owners. By understanding how these rates are calculated, exploring options for relief or exemption, and staying informed about the rules and regulations, property owners can minimize the impact of rates payable on their bottom line. Whether through appealing rateable values, actively marketing properties, or applying for relief schemes, property owners have options to mitigate the financial burden of empty property rates.