Empty rates on commercial property, also known as business rates, can often be a significant financial burden for property owners In this article, we will delve into what empty rates are, why they are charged, and how property owners can potentially mitigate their impact.
Empty rates on commercial property are taxes that are levied on properties that are unoccupied for an extended period of time The logic behind these rates is to incentivize property owners to keep their buildings occupied, thereby preventing vacant properties from blighting the local area and driving down property values.
The rates are set by the local government and are based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA) The rateable value is essentially an estimate of how much rent the property could fetch on the open market at a given point in time.
The amount of empty rates that a property owner has to pay is calculated as a percentage of the rateable value For properties that have been empty for more than three months, the standard rate is set at 50% of the rateable value However, for certain types of properties, such as industrial buildings and warehouses, the empty rate can be as high as 100% of the rateable value.
Empty rates can be a significant financial burden for property owners, especially in cases where the property has been unoccupied for an extended period of time And with the economic uncertainty brought on by the COVID-19 pandemic, many commercial property owners have found themselves grappling with the issue of empty rates.
There are, however, some ways in which property owners can potentially mitigate the impact of empty rates on their bottom line One option is to apply for exemptions or reliefs that may be available to them For example, if the property is undergoing major repairs or renovations, the owner may be able to apply for a temporary exemption from empty rates.
Another possible avenue for relief is through the “small business rates relief” scheme, which offers discounted rates for properties with a rateable value below a certain threshold empty rates commercial property. Property owners should check with their local council to see if they qualify for any such relief schemes.
In some cases, property owners may also be able to minimize the impact of empty rates by exploring alternative uses for their unoccupied buildings For example, they could consider renting out the property for temporary events or converting it into a temporary pop-up shop or coworking space By generating some income from the property, they may be able to offset some of the empty rates costs.
However, it’s worth noting that any changes to the use of the property may have implications for its rateable value, so property owners should seek advice from a professional before making any drastic changes.
Another strategy that property owners can employ to reduce their empty rates liability is to engage in discussions with the local council While empty rates are a legal obligation, some councils may be willing to work with property owners to find a solution that is mutually beneficial This could involve negotiating a payment plan or exploring other ways to ease the financial burden.
Ultimately, empty rates on commercial property can be a complex and challenging issue for property owners to navigate By understanding the reasons behind these rates and exploring the various options available to them, property owners can take steps to mitigate their impact and potentially ease the financial burden they impose.
In conclusion, empty rates on commercial property are taxes levied on unoccupied properties to incentivize property owners to keep their buildings occupied They can be a significant financial burden, but there are ways in which property owners can potentially mitigate their impact By exploring exemptions, relief schemes, alternative uses for the property, and engaging in discussions with the local council, property owners can take steps to lessen the financial strain of empty rates on their bottom line.