When it comes to owning a commercial property, there are many expenses that need to be taken into consideration. One of these expenses is the rates payable on empty commercial property. These rates can often be a significant burden on property owners, especially when the property is vacant for an extended period of time. In this article, we will discuss what rates payable on empty commercial property are, how they are calculated, and what property owners can do to minimize their impact.
rates payable on empty commercial property, also known as empty property rates, are a tax that is imposed on commercial properties that are unoccupied. These rates are in addition to the regular business rates that are payable on occupied commercial properties. The idea behind empty property rates is to incentivize property owners to keep their properties occupied and in use, rather than leaving them vacant for long periods of time.
The rates payable on empty commercial property are calculated based on the rateable value of the property. The rateable value is determined by the Valuation Office Agency (VOA) and represents the estimated yearly rental value of the property. The empty property rates are usually set at 50% of the full business rates that would be payable if the property were occupied.
For example, if a commercial property has a rateable value of £20,000 and the full business rates payable on the property would be £10,000 per year, then the rates payable on the property while it is empty would be £5,000 per year. It’s important to note that the rates payable on empty commercial property can vary depending on the location and type of property.
Property owners should be aware that there are certain exemptions and discounts available when it comes to empty property rates. For example, properties that are empty for a short period of time may be eligible for a temporary exemption of up to three months. Additionally, certain types of properties, such as listed buildings and industrial premises, may be eligible for a discount on their empty property rates.
Property owners can also take steps to minimize the impact of empty property rates on their finances. One option is to actively market the property for rent or sale in order to attract potential tenants or buyers. By doing so, property owners can reduce the amount of time that the property is vacant and, in turn, minimize the amount of empty property rates that are payable.
Another option is to consider leasing the property to a charity or community organization. Properties that are leased to these types of organizations may be eligible for a complete exemption from empty property rates. This can be a win-win situation for property owners, as it allows them to avoid paying empty property rates while also supporting a good cause.
In some cases, property owners may decide to apply for a formal appeal against the empty property rates that are payable on their property. This may be a viable option if the property has been empty for a legitimate reason, such as undergoing renovations or awaiting re-occupation. Property owners should be prepared to provide evidence and documentation to support their appeal.
Overall, rates payable on empty commercial property can be a significant financial burden for property owners. However, by understanding how these rates are calculated, taking advantage of available exemptions and discounts, and taking proactive steps to minimize their impact, property owners can effectively manage this expense. Ultimately, the goal should be to keep commercial properties occupied and in use, both to avoid empty property rates and to maximize the potential income from the property.