When it comes to owning commercial property, there are many expenses that come along with it. One of the most significant costs that property owners need to consider is the rates payable on empty commercial property. These rates can amount to a considerable expense, so it is essential for property owners to understand how they are calculated and how they can be minimized.
Rates payable on commercial property are essentially local taxes that are levied by local authorities in order to fund local services such as schools, roads, and waste management. These rates are usually calculated based on the rateable value of the property. The rateable value is an estimate of the annual rental value of the property as determined by the Valuation Office Agency (VOA).
When a commercial property becomes empty, the property owner is still required to pay rates on the property. This can be a significant financial burden, especially if the property remains unoccupied for an extended period. However, there are some exemptions and reliefs available to property owners to help reduce the rates payable on empty commercial property.
One of the most common reliefs available to property owners is the Empty Property Rate Relief. This relief provides a 100% exemption on rates payable on commercial properties that have been empty for a certain period of time. The length of time that a property must be empty in order to qualify for this relief varies depending on the local authority, but it is usually around three months.
In addition to Empty Property Rate Relief, there are also other reliefs available to property owners such as Small Business Rate Relief and Charitable Rate Relief. Small Business Rate Relief provides relief to small businesses occupying a single property with a rateable value below a certain threshold. Charitable Rate Relief provides relief to charities occupying commercial properties.
It is important for property owners to be aware of the reliefs and exemptions available to them in order to minimize the rates payable on empty commercial property. By taking advantage of these reliefs, property owners can reduce their financial burden and make owning commercial property more feasible.
In some cases, property owners may also be able to negotiate a reduction in rates payable on empty commercial property with the local authority. This can be done by providing evidence of the property’s condition or demonstrating efforts to actively market the property for rent or sale. Local authorities may be willing to consider these factors when determining the rates payable on empty commercial property.
Another way to minimize rates payable on empty commercial property is to consider leasing the property on a short-term basis. By leasing the property temporarily, property owners may be able to generate enough income to cover the rates payable on the property. This can be a great way to reduce the financial burden of owning an empty commercial property while also potentially attracting long-term tenants.
Overall, rates payable on empty commercial property can be a significant expense for property owners. However, by understanding how these rates are calculated and taking advantage of reliefs and exemptions, property owners can minimize this expense and make owning commercial property more financially viable. By exploring all available options and working with local authorities, property owners can effectively manage rates payable on empty commercial property.