Empty rates commercial property, often referred to as business rates on vacant properties, can be a significant financial burden for property owners. These rates can be a major concern for those who own or manage commercial properties, especially during times of economic uncertainty or when properties are temporarily vacant. 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.
What are empty rates commercial property?
Empty rates commercial property are essentially taxes that are levied on non-domestic properties that are unoccupied for an extended period of time. These rates are charged based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). The rateable value is essentially an estimate of the yearly rental value of a property if it were let on the open market.
How are empty rates commercial property Calculated?
Empty rates for commercial property are typically calculated at the same rate as the standard business rates that would be due if the property were occupied. However, there are certain exemptions and reliefs that may apply depending on the circumstances. For example, if a property is undergoing major refurbishment or structural alterations, it may be eligible for a temporary exemption from empty rates.
It is important to note that empty rates are a separate charge from other property-related expenses such as utilities, maintenance, and insurance. Property owners are still responsible for paying empty rates even if the property is not generating any income.
Mitigating the Impact of empty rates commercial property
There are several strategies that property owners can employ to mitigate the impact of empty rates commercial property. One option is to actively market the property for rent or sale in order to reduce the period of vacancy. By securing a tenant or buyer, property owners can avoid or minimize the empty rates that would otherwise be due.
Another approach is to explore the various exemptions and reliefs that may be available. For example, properties that are actively being marketed for rent or sale may qualify for a three-month exemption from empty rates. Additionally, properties that are in need of major repair or structural work may be eligible for longer-term exemptions.
Property owners may also consider seeking professional advice from a chartered surveyor or business rates specialist. These experts can help property owners navigate the complex rules and regulations surrounding empty rates commercial property and identify opportunities for savings. They can also assist with negotiating with the local council and appealing any incorrect rateable values.
Looking Ahead: Changes to Empty Rates Legislation
It is important for property owners to stay informed about any changes to empty rates legislation that may impact their properties. In recent years, there have been discussions about reforming the empty rates system to make it more equitable and responsive to market conditions. Property owners should monitor these developments and seek guidance on how any changes may affect their bottom line.
In conclusion, empty rates commercial property can be a significant financial burden for property owners, particularly during times of economic uncertainty or when properties are vacant. By understanding how empty rates are calculated, exploring exemptions and reliefs, and seeking professional advice, property owners can mitigate the impact of empty rates and protect their financial interests. Stay informed, be proactive, and take steps to minimize the effects of empty rates on your commercial property.