When it comes to owning commercial property, there are various expenses that owners must consider. One of the expenses that owners of empty commercial properties often find themselves grappling with is the rates payable on such properties. rates payable on empty commercial property can be a significant financial burden, and understanding how they are calculated and what options are available to property owners is crucial. In this article, we will delve into the specifics of rates payable on empty commercial property and provide insight into how property owners can navigate this often confusing aspect of property ownership.
In the United Kingdom, business rates are a tax on non-residential properties, including commercial properties such as shops, offices, and warehouses. The rates payable on commercial properties are 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 annual rent the property could fetch on the open market, as of a certain date.
When a commercial property becomes vacant, the owner is still required to pay business rates on the property. However, there are certain exemptions and reliefs available to property owners of empty commercial properties. Understanding these exemptions and reliefs can help property owners reduce the financial burden of rates payable on their vacant properties.
One of the main exemptions available to property owners of empty commercial properties is the empty property rate relief. Under this relief, owners of certain types of empty properties are exempt from paying business rates for a specified period. In England, for example, eligible properties with a rateable value of less than £2,900 are exempt from paying business rates for three months. Properties with a rateable value of between £2,900 and £12,000 are exempt from paying rates for six months.
In addition to the empty property rate relief, there are also other reliefs available to property owners of empty commercial properties. For example, properties that are undergoing major repair or structural alterations may be eligible for a 100% relief on business rates for up to 12 months. This relief can provide much-needed financial relief to property owners who are investing in the refurbishment of their vacant properties.
It is important for property owners to be aware of the exemptions and reliefs available to them and to take advantage of these opportunities to reduce their rates payable on empty commercial properties. Failure to do so can result in unnecessary financial strain on the property owner and can hinder efforts to bring the property back into productive use.
In addition to exemptions and reliefs, property owners of empty commercial properties should also be aware of their options for appealing the rateable value of their properties. If a property owner believes that the rateable value assigned to their property is inaccurate, they can appeal to the VOA to have the value reassessed. A lower rateable value can result in lower rates payable on the property, providing significant savings to the property owner.
Property owners should also be mindful of the implications of leaving a property empty for an extended period. In some cases, local authorities may charge a premium on the rates payable for properties that have been empty for a certain period of time. This premium is intended to discourage property owners from leaving their properties empty and to incentivize them to bring the property back into use.
In conclusion, rates payable on empty commercial property can be a significant financial burden for property owners. However, by understanding the exemptions and reliefs available, as well as their options for appealing the rateable value of their properties, property owners can reduce the financial strain associated with owning empty commercial properties. Being proactive and taking advantage of these opportunities can help property owners navigate this aspect of property ownership more effectively and ultimately make owning commercial property a more financially viable endeavor.