When it comes to owning commercial property, there are various expenses and fees that property owners must budget for. One significant cost that can catch property owners off guard is the rates payable on empty commercial properties. These rates, also known as business rates, can add a significant financial burden to property owners who are not aware of the rules and regulations surrounding them. In this article, we will explore what rates payable on empty commercial property are and how property owners can navigate these fees effectively.
Business rates are taxes that are levied on most non-domestic properties, including commercial properties such as offices, shops, warehouses, and factories. These rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). The rateable value represents the rental value of the property on a specific date, and it is used to calculate the amount of business rates that a property owner must pay.
When a commercial property is empty, property owners are still required to pay business rates. This is because the property is still benefiting from local services such as waste collection, street cleaning, and infrastructure maintenance. The rates payable on empty commercial properties can vary depending on the size and location of the property, as well as the current rateable value determined by the VOA.
However, there are some exceptions and reliefs available to property owners who have empty commercial properties. One common relief is the Empty Property Rate Relief, which provides a 100% exemption from business rates for the first three months that a property is empty. After the initial three-month period, the property owner will be required to pay the full amount of business rates unless they qualify for additional reliefs or exemptions.
Another relief that property owners can apply for is the Small Business Rate Relief, which provides discounts on business rates for properties with a rateable value below a certain threshold. Property owners who qualify for this relief can see a significant reduction in the amount of business rates that they are required to pay, making it easier to manage the financial burden of owning an empty commercial property.
In addition to reliefs and exemptions, property owners can also consider strategies to reduce the amount of business rates payable on empty commercial properties. One effective strategy is to actively market the property for rent or sale, as this can demonstrate to the local authorities that the property is actively being marketed and is not intentionally being left empty to avoid paying business rates.
Property owners can also consider applying for a Class A exemption, which provides relief from business rates for properties that are undergoing major structural repairs or alterations. This exemption can provide significant savings for property owners who are investing in improving their empty commercial properties, as it allows them to focus on redevelopment without the added financial burden of business rates.
It is important for property owners to stay informed about the rules and regulations surrounding rates payable on empty commercial properties, as failure to pay these rates can result in hefty fines and legal action. By understanding the available reliefs, exemptions, and strategies for reducing business rates, property owners can effectively navigate the financial challenges of owning empty commercial properties.
In conclusion, rates payable on empty commercial properties can be a significant financial burden for property owners. However, there are various reliefs, exemptions, and strategies available to help property owners manage these costs effectively. By staying informed and taking proactive steps to reduce business rates, property owners can navigate the challenges of owning empty commercial properties and focus on maximizing the potential of their investments.