Empty rates commercial property, also known as business rates, are a common concern for commercial property owners and investors. These rates are charged on non-residential properties that are empty for a certain period of time. In this article, we will explore what empty rates commercial property are, why they are charged, and how property owners can navigate and mitigate these charges.
What are empty rates commercial property?
Empty rates commercial property, or business rates, are taxes that are levied on non-residential properties that are empty for a certain period of time. The rates are charged by local authorities in the UK and are payable by the owner of the property. The amount of empty rates commercial property charged is based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA).
Empty rates commercial property can be a significant financial burden for property owners, especially when the property remains empty for an extended period of time. The rates are intended to incentivize property owners to rent out or sell their empty properties, as empty properties are seen as a waste of valuable resources.
Why are empty rates commercial property Charged?
Empty rates commercial property are charged for several reasons. Firstly, they are intended to discourage property owners from leaving their properties empty for extended periods of time. By charging empty rates, local authorities hope to encourage property owners to either rent out or sell their properties, thereby increasing the availability of commercial space and stimulating economic activity.
Secondly, empty rates commercial property are also charged to help fund local services and infrastructure. The revenue generated from these rates is used to fund public services such as schools, roads, and healthcare facilities. By charging empty rates, local authorities are able to generate additional revenue to support these services without placing an additional burden on residents.
How to Navigate empty rates commercial property
Navigating empty rates commercial property can be a complex and challenging process for property owners. However, there are several strategies that property owners can use to mitigate the impact of these charges. One common strategy is to explore options for reducing the rateable value of the property. This can be done by appealing to the VOA to reassess the rateable value of the property based on factors such as market conditions, depreciation, and changes in the property’s intended use.
Another strategy for navigating empty rates commercial property is to explore exemptions and reliefs that may be available. For example, certain types of properties such as listed buildings or properties undergoing renovation may be eligible for exemptions or reliefs from empty rates. Property owners should carefully review the criteria for these exemptions and reliefs to determine if they may apply to their property.
Property owners can also consider exploring alternative uses for their empty properties to generate income and reduce the impact of empty rates. For example, property owners could consider renting out the property on a short-term basis for events or pop-up shops, or exploring options for temporary uses such as storage or coworking space. By generating income from the property, property owners may be able to offset the cost of empty rates commercial property.
In addition, property owners should carefully monitor the occupancy status of their properties and take proactive steps to avoid empty rates. For example, property owners should actively market their properties to potential tenants, maintain the property in good condition, and consider offering incentives such as rent-free periods or flexible lease terms to attract tenants. By taking proactive steps to keep the property occupied, property owners can avoid empty rates commercial property altogether.
In conclusion, empty rates commercial property can be a significant financial burden for property owners, but there are strategies that property owners can use to navigate and mitigate these charges. By exploring options for reducing the rateable value of the property, exploring exemptions and reliefs, generating income from alternative uses, and taking proactive steps to avoid empty rates, property owners can effectively manage the impact of empty rates commercial property and minimize their financial exposure.