When it comes to owning commercial property, there are many factors to consider, one of which is the rates payable on empty commercial property. This is a cost that many property owners may not be aware of until they are faced with an empty property and a hefty bill. In this article, we will delve into what rates payable on empty commercial property are, how they are calculated, and what property owners can do to minimize this expense.
First and foremost, it is important to understand what rates payable on empty commercial property actually are. Business rates, also known as non-domestic rates, are a tax on business properties that are used to fund local services. The amount of rates payable is determined by the rateable value of the property, which is assessed by the Valuation Office Agency (VOA) in England, the Scottish Assessors in Scotland, and the Land and Property Services in Northern Ireland.
rates payable on empty commercial property refer to the amount of business rates that are still due on a property that is currently unoccupied. In the past, certain properties may have been eligible for a period of empty property relief, which exempted them from paying rates on empty buildings for a certain period of time. However, this relief has been significantly reduced in recent years, leaving property owners with a potentially large financial burden if they are unable to find tenants for their empty properties.
The calculation of rates payable on empty commercial property can vary depending on the local authority and the specific circumstances of the property. In general, the rateable value of the property is multiplied by the appropriate multiplier, which is set by the government each year. This gives the annual rates payable on the property, which is then divided by 12 to give the monthly rate.
One way that property owners can potentially reduce their rates payable on empty commercial property is by applying for any available exemptions or reliefs. While empty property relief has been significantly reduced, there are still certain circumstances in which property owners may be eligible for relief. For example, if a property is undergoing major repair work or structural changes, the owner may be able to claim an exemption from paying rates on the property for a limited period of time.
Another option for property owners is to consider entering into a short-term lease or license agreement with a temporary tenant. This can have the dual benefit of generating some income from the property while also potentially making the property eligible for small business rates relief, which provides a discount on business rates for properties with a rateable value below a certain threshold.
Property owners may also want to consider appealing the rateable value of their property if they believe that it has been assessed incorrectly. The rateable value is determined by the VOA or local assessors based on a number of factors, including the rental value of the property. If property owners believe that the rateable value does not accurately reflect the true value of the property, they can submit an appeal to have it reassessed.
In conclusion, rates payable on empty commercial property can be a significant cost for property owners, especially in a challenging economic climate where finding tenants for commercial properties can be difficult. However, by understanding how these rates are calculated and exploring options for reducing them, property owners can potentially minimize this expense and ensure that their empty properties do not become a financial burden. Whether through applying for exemptions, entering into short-term lease agreements, or appealing the rateable value of the property, there are steps that property owners can take to mitigate the costs of rates payable on empty commercial property.