Understanding Rates Payable On Empty Commercial Property

rates payable on empty commercial property

As a commercial property owner, you are likely aware of the various expenses that come with owning and maintaining such properties. One of the costs that property owners need to factor in is rates payable on empty commercial property. These rates can vary based on the location, size, and type of property, but understanding how they are calculated and what they cover can help you plan for these expenses more effectively.

Rates payable on empty commercial property, also known as business rates, are taxes that property owners need to pay to the local government. These rates are typically calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). The rateable value is an estimate of the yearly rental value of the property if it were let on the open market, as of a specific date.

The local government sets the rateable value for properties within its jurisdiction, and this value is used to calculate the business rates payable. The actual rates payable are calculated by multiplying the rateable value by the multiplier set by the government, also known as the Uniform Business Rate (UBR). This rate can vary depending on the location and changes annually.

For properties that are empty, the rules for business rates can differ from those for occupied properties. In most cases, empty commercial properties are still subject to business rates, although some exemptions or discounts may apply. For example, properties that are empty due to repair or structural work may qualify for a three-month exemption from business rates, after which the full rates may apply.

Additionally, properties that are empty for a certain period of time may qualify for an extended exemption or a discount on the rates payable. It is important to check with the local council or a professional advisor to understand the specific rules and regulations that apply to empty commercial properties in your area.

It is worth noting that rates payable on empty commercial property can be a significant expense for property owners, especially if the property remains vacant for an extended period. In some cases, property owners may struggle to cover these costs, particularly if they are facing financial difficulties or trying to attract tenants to the property.

There are a few strategies that property owners can consider to help manage the rates payable on empty commercial property more effectively. One option is to negotiate with the local council to see if any exemptions or discounts may apply to the specific circumstances of the property. For example, if the property is undergoing refurbishment or redevelopment, there may be grounds for a reduction in the rates payable.

Property owners can also explore the option of leasing the property on a short-term basis to generate some income and help offset the rates payable. This can be a viable option for properties that are likely to be empty for a short period, as it can help reduce the financial burden of rates payable while still leaving the property available for potential long-term tenants.

Another option is to consider appealing the rateable value of the property if there are grounds to believe that it has been set too high. This process involves submitting evidence to the VOA to support a lower rateable value, which can then lead to a reduction in the rates payable. It is important to seek professional advice before pursuing an appeal to ensure that the process is handled correctly.

Overall, rates payable on empty commercial property are an important consideration for property owners, and understanding how they are calculated and what options are available can help manage these costs more effectively. By staying informed and exploring different strategies, property owners can navigate the challenges of empty commercial properties while minimizing the financial impact of business rates.