Empty rates on commercial property can be a significant headache for property owners and investors alike Also known as “business rates” or “non-domestic rates,” empty rates are taxes imposed on non-residential properties that are unoccupied This additional financial burden can make owning and leasing commercial property less profitable and more challenging In this article, we will delve into what empty rates on commercial property are, how they are calculated, and what property owners can do to mitigate their impact.
Empty rates on commercial property were introduced in 2008 as part of the Government’s efforts to encourage property owners to keep their buildings occupied and in use The idea behind empty rates is to prevent property owners from leaving their properties vacant for extended periods, thus encouraging them to actively seek tenants.
Empty rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA) The rateable value is an estimate of the open market rental value of the property as of a specific date The current rateable value is used to calculate the business rates payable on a property.
When a commercial property becomes unoccupied, the property owner is still liable to pay empty rates However, there are some exceptions and exemptions that can apply For example, if a property is unoccupied and undergoing major repair or renovation works, the owner may be able to claim an exemption from empty rates for a certain period Additionally, if a property is unoccupied due to legal restrictions, such as being unable to secure a tenant due to planning issues, the owner may also be exempt from empty rates.
Property owners need to be aware of their obligations regarding empty rates on commercial property to avoid potential penalties and fines Failure to pay empty rates can result in legal action being taken against the property owner, including court proceedings, bailiff action, or even the seizure of assets.
There are a few strategies that property owners can employ to mitigate the impact of empty rates on their commercial properties empty rates commercial property. One option is to try to actively market the property and find a new tenant as quickly as possible By doing so, the property owner can minimize the amount of time that the property is unoccupied and therefore reduce the empty rates liability.
Another strategy is to consider renting out the property on a short-term basis to reduce the empty rates liability This could involve offering the property for short-term leases or temporary use, such as pop-up shops or events By generating some income from the property, the owner can offset some of the costs associated with empty rates.
Property owners can also consider exploring the various exemptions and reliefs available for empty rates on commercial property For example, properties that are unoccupied and undergoing substantial renovation works may be eligible for a relief from empty rates for a certain period Property owners should consult with a qualified tax advisor or property specialist to explore all available options for reducing empty rates liability.
It is essential for property owners to stay informed about changes in empty rates legislation and regulations that may impact their commercial properties Keeping up to date with changes in empty rates laws can help property owners better plan for potential empty rates liabilities and take proactive steps to mitigate their impact.
In conclusion, empty rates on commercial property can be a significant financial burden for property owners and investors Understanding how empty rates are calculated, the exemptions that may apply, and strategies for mitigating their impact is crucial for property owners to manage their costs effectively By staying informed and proactive in their approach to empty rates, property owners can navigate this complex aspect of property ownership more successfully.