When it comes to owning and managing commercial property, one of the key financial considerations that property owners need to be aware of is the rates that are payable on empty properties. These rates, also known as business rates or non-domestic rates, are taxes that are levied on commercial properties in the UK. In this article, we will explore the implications of rates payable on empty commercial property and what property owners need to know to manage this cost effectively.
Business rates are a tax that is levied on commercial properties based on their rateable value. The rateable value is determined by the Valuation Office Agency (VOA) and is based on the rental value of the property as of a certain date. Property owners are required to pay business rates to their local council, who then use the revenue to fund local services and infrastructure.
One of the key issues that property owners face when it comes to business rates is the liability that arises when a property is left empty. In the UK, property owners are required to pay business rates on empty properties unless they qualify for an exemption or relief. This means that even if a property is vacant and not generating any income, the owner is still liable to pay rates on it.
The rates payable on empty commercial property are a contentious issue for property owners, as they can significantly impact the profitability of their investments. In some cases, the rates payable on an empty property can be as high as they would be if the property were occupied, making it an added financial burden for property owners.
There are, however, certain exemptions and reliefs that property owners can apply for to reduce or eliminate the rates payable on empty commercial property. One of the most common exemptions is the 3-month empty property rate relief, which allows property owners to claim a 100% discount on their rates for the first three months that a property is empty.
In addition to the 3-month empty property rate relief, there are other exemptions and reliefs available to property owners, depending on the specific circumstances of the property. For example, if a property is undergoing major structural repairs, the owner may be able to claim a discount on their rates, known as the empty property relief. Similarly, if a property is owned by a charity or a community amateur sports club, they may be eligible for relief on their rates.
It is important for property owners to be aware of the exemptions and reliefs that are available to them, as they can help to reduce the financial impact of rates payable on empty commercial property. By taking advantage of these relief options, property owners can minimize their costs and make their investments more profitable.
In addition to exemptions and reliefs, property owners can also take steps to reduce the rates payable on empty commercial property by actively managing their properties. For example, property owners can consider leasing out their empty properties on a temporary basis to qualify for relief on their rates. By generating some income from the property, owners may be able to reduce the rates payable and make the property more financially viable.
Overall, rates payable on empty commercial property are a significant financial consideration for property owners in the UK. By understanding the implications of business rates and taking advantage of the exemptions and reliefs available, property owners can effectively manage this cost and make their investments more profitable. It is important for property owners to stay informed about changes in rates and regulations, so they can make informed decisions about their properties and finances.