When it comes to owning commercial property, it is important for property owners to be aware of the various costs associated with ownership. One such cost that often catches property owners off guard is the rates payable on empty commercial property. These rates can add up quickly and significantly impact a property owner’s bottom line. In this article, we will explore what rates payable on empty commercial property are, how they are calculated, and provide some tips for minimizing these costs.
rates payable on empty commercial property, also known as empty property rates, are taxes that must be paid on commercial properties that are unoccupied. These rates are separate from standard business rates, which are paid on occupied commercial properties. The intention behind empty property rates is to incentivize property owners to bring vacant properties back into use, rather than allowing them to sit empty and fall into disrepair.
The amount of rates payable on empty commercial property is calculated based on the rateable value of the property. The rateable value is determined by the Valuation Office Agency (VOA) and represents the estimated annual rental value of the property. The empty property rates are usually set at a percentage of the rateable value, with the exact percentage varying depending on the local authority.
For example, if a property has a rateable value of £20,000 and the empty property rate is set at 50%, the property owner would be required to pay £10,000 in empty property rates annually. This can add up to a significant amount of money, especially for property owners with multiple vacant properties.
There are a few ways in which property owners can potentially reduce their empty property rates. One option is to apply for an exemption or relief from paying empty property rates. Some properties may be eligible for exemptions, such as properties that are undergoing major repairs or renovations, or properties that are listed buildings. Property owners should check with their local authority to see if they qualify for any exemptions or relief programs.
Another option for reducing empty property rates is to explore short-term leasing options for the property. By leasing the property on a short-term basis, property owners may be able to avoid paying empty property rates altogether. While this may require some effort in finding tenants and managing the leasing process, it can be a more cost-effective solution than paying empty property rates.
It is also important for property owners to stay informed about changes to empty property rate regulations. The government may periodically introduce new policies or programs aimed at incentivizing property owners to bring vacant properties back into use. By staying up to date with these changes, property owners can take advantage of any new opportunities to reduce their empty property rates.
In conclusion, rates payable on empty commercial property can be a significant financial burden for property owners. Understanding how these rates are calculated and exploring options for reducing them can help property owners minimize the impact on their bottom line. By staying informed about exemptions, relief programs, and leasing options, property owners can take proactive steps to manage their empty property rates effectively.