business rates on empty commercial property, also known as vacant property rates, can be a significant financial burden for businesses. These rates are charged by local authorities in the UK on commercial properties that are empty for a certain period of time. The purpose of these rates is to encourage property owners to bring their empty buildings back into use or to sell or lease them to someone who will.
However, the way in which business rates on empty commercial property are calculated can be complex and can vary depending on the size and location of the property. This can make it difficult for property owners to know how much they will be charged and can add to the financial uncertainty of owning an empty commercial property.
One of the main issues with business rates on empty commercial property is that they can place a significant financial burden on property owners, particularly small businesses. This is because business rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency and can be quite high, even for properties that are empty.
For example, a small shop in a city centre that is empty for several months could still be liable for thousands of pounds in business rates. This can be a huge financial burden for small businesses that are already struggling, particularly during times of economic uncertainty like the current COVID-19 pandemic.
Another issue with business rates on empty commercial property is that they can discourage property owners from investing in their properties. Instead of renovating or improving their empty buildings, property owners may choose to leave them empty to avoid paying business rates. This can have a negative impact on local communities as empty buildings can become eyesores and attract crime and anti-social behaviour.
Some property owners have also been known to deliberately demolish their empty buildings to avoid paying business rates. This not only has a negative impact on the local environment but can also lead to a shortage of commercial properties in the area, driving up rents for businesses that do want to operate there.
The issue of business rates on empty commercial property is particularly acute in areas that are already struggling economically. In these areas, property owners may find it difficult to attract tenants or buyers for their empty buildings, meaning they could be stuck paying business rates indefinitely. This can place a huge financial strain on property owners and can make it even harder for struggling communities to attract new businesses and investment.
There have been calls for reform of the business rates system to make it fairer for property owners. Some have suggested that empty property rates should be reduced or scrapped altogether to encourage property owners to bring their buildings back into use. Others have proposed that business rates should be based on the actual rental value of the property, rather than its rateable value.
In the meantime, property owners that are struggling to pay their business rates on empty commercial property do have some options available to them. For example, they may be able to apply for exemptions or reliefs from their local authority if they can prove that they are actively trying to bring their property back into use. They may also be able to negotiate with their local authority to come to a payment plan or arrangement that is more affordable for them.
Overall, the issue of business rates on empty commercial property is a complex one that can have a significant impact on property owners and local communities. It is clear that reform is needed to make the system fairer and more sustainable for all involved. Until then, property owners will need to navigate the current system as best they can and work with their local authorities to find solutions that work for them.