When it comes to owning commercial property, there are a variety of costs that must be factored in. One of these costs that property owners may need to consider is the rates payable on empty commercial property. In this article, we will discuss what exactly these rates are, how they are calculated, and what property owners can do to manage them effectively.
rates payable on empty commercial property, also known as business rates, are charges imposed by local authorities on commercial properties that are unoccupied. These rates are separate from the usual property taxes that owners are required to pay and are meant to encourage property owners to keep their properties in use and prevent them from leaving their properties vacant for extended periods of time.
The rates payable on empty commercial property are determined based on the rateable value of the property, which is assessed by the Valuation Office Agency (VOA). The rateable value is an estimate of the annual rental value of the property, and the rates payable are a certain percentage of this value set by the local government.
In England, for example, the rates payable on empty commercial property are 100% of the rateable value for the first three months that the property is vacant, and then they increase to 200% after three months. This means that property owners are effectively paying double the amount they would pay if the property were occupied.
There are several exceptions to these rules, however. Properties with a rateable value of less than £2,900 are exempt from paying these rates, as well as properties that are used for specific purposes such as industrial storage or agriculture. It is important for property owners to check with their local authority to determine what rates apply to their specific situation.
So, what can property owners do to manage these rates effectively? One option is to try to find a tenant for the property as soon as possible to avoid having to pay the increased rates after three months of vacancy. This may involve lowering the rent or offering incentives to attract tenants, but it can ultimately save property owners money in the long run.
Another option is to consider appealing the rateable value of the property if they believe it has been overassessed by the VOA. Property owners have the right to challenge the rateable value and provide evidence to support their case, which can result in a lower assessment and ultimately lower rates payable on the property.
In some cases, property owners may also be eligible for certain reliefs or discounts on their rates payable on empty commercial property. For example, properties that are being refurbished or are in the process of being redeveloped may qualify for a temporary exemption from paying these rates. It is important for property owners to research their options and take advantage of any reliefs that may be available to them.
Overall, rates payable on empty commercial property can be a significant cost for property owners to consider. By understanding how these rates are calculated, exploring options for managing them effectively, and taking advantage of any reliefs that may be available, property owners can minimize the impact of these costs on their bottom line. With careful planning and proactive management, property owners can navigate the complex world of rates payable on empty commercial property successfully.