When it comes to owning commercial property, there are many expenses that property owners need to be aware of. One of these expenses is the rates payable on empty commercial property. These rates can add up quickly and have a significant impact on a property owner’s bottom line. In this article, we will take a closer look at what rates payable on empty commercial property are, how they are calculated, and what property owners can do to minimize these costs.
rates payable on empty commercial property, also known as empty property rates or business rates, are taxes that property owners must pay on commercial properties that are unoccupied. In many countries, including the United Kingdom, property owners are required to pay these rates if their property is empty for an extended period of time. The purpose of these rates is to discourage property owners from leaving their properties vacant and to encourage them to put their properties to productive use.
The rates payable on empty commercial property are calculated based on the rateable value of the property. The rateable value is an estimate of the annual rent that the property could fetch on the open market. In the UK, the rateable value is determined by the Valuation Office Agency (VOA) and is used by local authorities to calculate business rates. When a commercial property becomes empty, the property owner is required to pay these rates at a reduced rate, which is typically around 50% of the normal business rates. However, after a certain period of time, usually around three months, the property owner may be required to pay the full business rates on the empty property.
Property owners can take steps to minimize the rates payable on empty commercial property. One option is to apply for an exemption from paying these rates. In the UK, for example, certain types of properties may be exempt from empty property rates, such as listed buildings, properties that are temporarily unoccupied due to repairs or renovation, and properties that are used for certain charitable purposes. Property owners may also be able to apply for a temporary exemption if they are actively marketing the property for rent or sale.
Another option for property owners is to explore the possibility of leasing the property to a charity or community organization. In the UK, property owners who lease their empty commercial property to a registered charity or community amateur sports club may be eligible for 80% mandatory charitable relief on their business rates. This can significantly reduce the rates payable on the property and provide a valuable source of income for the charity or organization.
Property owners can also consider other ways to reduce the rates payable on empty commercial property, such as temporarily occupying the property themselves or using it for storage purposes. In some cases, property owners may be able to negotiate a reduction in the rates payable with their local authority, especially if the property has been empty for an extended period of time and is proving difficult to rent or sell.
Overall, rates payable on empty commercial property can be a significant expense for property owners. However, by understanding how these rates are calculated and exploring options for minimizing them, property owners can take steps to reduce this financial burden. Whether it’s applying for exemptions, leasing the property to a charity, or negotiating with the local authority, there are options available to help property owners manage the costs associated with empty commercial property.