When it comes to owning commercial property, one of the key factors that must be considered is the issue of business rates These rates are taxes that are levied on non-residential properties, including retail shops, offices, warehouses, and other commercial buildings One particular aspect of business rates that can have a significant impact on property owners is the rates that apply to empty properties.
Empty commercial properties are subject to business rates just like occupied ones, which can often lead to financial challenges for property owners In a tough economic climate, when businesses are struggling to survive and vacancy rates are on the rise, the burden of empty property rates can be particularly difficult to bear In this article, we will explore the implications of business rates on empty commercial property and discuss some strategies for property owners to navigate this challenging issue.
Business rates are a tax that is charged on most non-residential properties in the United Kingdom, with the revenue collected going towards local services such as schools, roads, and waste collection The amount of business rates payable is based on the rateable value of a property, which is determined by the Valuation Office Agency (VOA) Properties are placed into one of eight valuation bands, with each band representing a different level of rateable value.
For properties that are empty, the rules around business rates can be particularly onerous Since 2008, the government has removed the exemption for empty properties from business rates, meaning that owners of vacant commercial buildings are required to pay rates on the property Initially, there was a 100% relief for the first three months that a property remained empty, but this has now been reduced to just 50% relief for the first three months for most properties After the initial three-month period, the full rate of business rates must be paid.
This change in policy has had a significant impact on property owners, particularly in areas where vacancies are high and rental demand is low In these circumstances, owners of empty commercial properties may find themselves facing substantial bills for business rates on buildings that are not generating any income business rates empty commercial property. This can be a huge financial burden, especially for smaller property owners who may be struggling to find tenants or buyers for their properties.
So, what can property owners do to navigate the challenges of business rates on empty commercial property? One option is to explore the various reliefs and exemptions that may be available For example, some properties may be eligible for small business rate relief, which can provide a discount on the amount of business rates payable Additionally, properties that are undergoing major refurbishment or are in a designated Enterprise Zone may qualify for exemptions from business rates.
Another strategy for property owners facing high business rates on empty properties is to consider leasing the property to a charity or community organization In some cases, properties that are occupied by charities or non-profit organizations may be eligible for relief from business rates By leasing the property to a qualifying organization, property owners may be able to reduce the amount of rates payable on the property.
Property owners may also want to consider investing in marketing and promotion efforts to attract new tenants or buyers for their vacant properties By showcasing the benefits and potential of the property, owners may be able to generate interest from businesses looking for space to rent or purchase Additionally, offering incentives such as rent-free periods or flexible lease terms may help to make the property more attractive to potential tenants.
Ultimately, navigating the impact of business rates on empty commercial property requires careful planning and consideration By exploring available reliefs and exemptions, considering alternative uses for the property, and investing in marketing efforts, property owners can work towards minimizing the financial impact of business rates on their vacant properties In a challenging economic climate, it is more important than ever for property owners to be proactive and strategic in managing their empty commercial properties.