When it comes to owning commercial property, one of the costs that property owners must be aware of is the rates payable on empty commercial property. These rates can add up quickly and significantly impact the financial health of a business. In this article, we will discuss what rates payable on empty commercial property are, how they are calculated, and some strategies that property owners can use to minimize these costs.
rates payable on empty commercial property are essentially taxes that property owners must pay on properties that are unoccupied. These rates are imposed by local governments as a way to generate revenue and encourage property owners to keep their properties occupied and contributing to the local economy. The rationale behind these rates is that empty properties do not generate income and can become a burden on local services and infrastructure.
The rates payable on empty commercial property are typically calculated based on the rateable value of the property. The rateable value is an estimate of the property’s open market rental value as of a certain date. This value is determined by the local government’s Valuation Office Agency (VOA) and is used to calculate the rates payable on the property.
In general, the rates payable on empty commercial property are set at 50% of the normal business rates for the first three months that a property is unoccupied. After three months, the rates payable increase to the full amount of the normal business rates. This can be a significant financial burden for property owners, especially if the property remains unoccupied for an extended period of time.
There are, however, some exemptions and reliefs available to property owners who are facing high rates payable on empty commercial property. For example, properties with a rateable value of less than £2,600 are exempt from paying any rates on empty properties. Additionally, properties that are undergoing major repairs or structural changes may be eligible for relief from rates payable on empty commercial property.
Property owners can also apply for relief from rates payable on empty commercial property if they are actively marketing the property for rent or sale. In order to qualify for this relief, property owners must demonstrate that they are taking concrete steps to market the property, such as advertising it online or in real estate publications, and showing the property to potential tenants or buyers.
Another strategy that property owners can use to minimize rates payable on empty commercial property is to consider renting the property out on a short-term basis. This can help generate some income from the property while also demonstrating to the local government that the property is actively being used and contributing to the local economy. Short-term rentals can also help property owners cover some of the costs associated with maintaining an empty property, such as security and maintenance.
Property owners can also explore the option of leasing the property to a charity or community organization. In some cases, properties that are leased to charities or community organizations may be eligible for relief from rates payable on empty commercial property. This can be a win-win situation for both the property owner and the charity, as the property owner can reduce their rates payable while the charity or community organization gains access to a space that they may not otherwise be able to afford.
In conclusion, rates payable on empty commercial property can be a significant financial burden for property owners. However, there are strategies that property owners can use to minimize these costs and ensure that their properties are not sitting empty and unused. By actively marketing the property, renting it out on a short-term basis, or leasing it to a charity or community organization, property owners can reduce their rates payable on empty commercial property and potentially generate some income in the process.