Business rates are a tax imposed on commercial properties by the local government in the United Kingdom These rates are calculated based on the rateable value of the property and are used to fund local services and amenities However, when a commercial property sits empty, business rates can become a burdensome expense for property owners In this article, we will explore the implications of business rates on empty commercial property and provide insights on how property owners can navigate this challenging situation.
Empty commercial properties are subject to business rates just like any other occupied property The logic behind this is to discourage property owners from leaving their properties vacant by imposing a financial penalty This is intended to incentivize property owners to keep their properties occupied and contributing to the local economy However, this practice can create financial difficulties for property owners, especially during times of economic downturn when finding tenants becomes challenging.
The rateable value of a property is determined by the Valuation Office Agency (VOA) based on factors such as the size, location, and usage of the property This rateable value is used to calculate the business rates that the property owner is required to pay In the case of empty commercial properties, property owners are still required to pay business rates at a reduced rate This reduction is commonly referred to as the empty property relief.
Empty property relief allows property owners to claim a temporary exemption from paying the full business rates on their empty property The duration of this relief varies depending on the type of property For example, industrial properties are eligible for 100% relief for the first six months, while offices and retail properties are eligible for 100% relief for the first three months After this initial period, the relief is reduced to 10% for most commercial properties.
Despite the availability of empty property relief, many property owners still find it challenging to keep up with the business rates on their empty properties business rates empty commercial property. This is particularly true for owners of larger properties with high rateable values The financial burden of paying business rates on empty properties can deter property owners from investing in the maintenance and improvement of their properties, further exacerbating the issue of vacant properties in the commercial real estate market.
Property owners facing financial difficulties due to business rates on empty properties have a few options available to them One option is to explore the possibility of appealing the rateable value of their property with the VOA If the property owner believes that the rateable value has been inaccurately assessed, they can provide evidence to support their case and request a review A successful appeal could result in a lower rateable value and reduced business rates.
Another option for property owners is to consider leasing out their empty properties on a short-term basis to temporary tenants This can help generate rental income to offset the business rates while also keeping the property occupied and maintained Property owners can explore options such as pop-up shops, temporary office spaces, or event venues to attract temporary tenants.
Property owners can also consider negotiating with the local council for a discretionary rate relief Local councils have the authority to grant discretionary relief to property owners facing financial hardship due to business rates Property owners can submit a request detailing their circumstances and reasons for seeking relief, and the council will consider their case on an individual basis.
In conclusion, business rates on empty commercial properties can pose a significant financial challenge for property owners The empty property relief and other options mentioned in this article provide some relief for property owners struggling to keep up with the business rates However, navigating the impact of business rates on empty commercial property requires proactive management and strategic decision-making By exploring different options and seeking professional advice where necessary, property owners can find ways to mitigate the financial burden of empty property rates and maximize the value of their properties in the long run.