Commercial property owners often face the challenge of dealing with rates payable on empty properties. These rates can add up quickly and become a significant financial burden for property owners. It is crucial to understand how rates are calculated and the options available to reduce or manage these costs effectively.
rates payable on empty commercial property, also known as empty property rates or vacant property rates, are charged by local authorities in the UK. These rates are a form of business rates that must be paid on properties that are empty and not being used for business purposes. The purpose of these rates is to encourage property owners to bring their properties back into use and prevent properties from sitting vacant for extended periods.
The rates payable on empty commercial property are different from regular business rates, which are based on the rateable value of a property and are calculated based on the property’s rental value. Empty property rates are usually set at 100% of the normal business rates for the first three months that a property is vacant. After the initial three-month period, the rates payable on empty commercial property can increase to 150% of the normal business rates.
The increase in rates after three months is intended to incentivize property owners to take action to bring their properties back into use. However, for some property owners, paying these increased rates can be a significant financial burden, especially if the property is not generating any income.
There are some exemptions and relief schemes available to property owners who are struggling to pay the rates on their empty commercial properties. One of the most common exemptions is the six-month exemption for newly constructed properties. Properties that have been recently constructed and have not yet been occupied may be eligible for a six-month exemption from empty property rates.
Additionally, properties that are undergoing major renovations or structural repairs may also be eligible for relief from empty property rates. Property owners must apply for these exemptions and relief schemes through their local authority, providing documentation and evidence to support their claim.
Property owners may also be able to reduce their empty property rates by taking steps to actively market their property for sale or rent. By demonstrating that they are actively seeking a tenant or buyer for the property, owners may be able to secure a reduction in the rates payable on the property.
Another option for property owners facing high rates on empty commercial property is to consider leasing the property on a short-term basis. By entering into a short-term lease agreement with a tenant, property owners may be able to avoid paying empty property rates while generating some income from the property.
It is essential for property owners to be proactive in managing their empty commercial properties to avoid incurring high rates payable. By staying informed about the exemptions and relief schemes available and taking action to market the property or explore short-term leasing options, owners can reduce the financial impact of 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 the options available to reduce or manage them effectively is crucial for property owners. By staying informed about exemptions and relief schemes, actively marketing the property, or exploring short-term leasing options, property owners can mitigate the financial impact of empty property rates and work towards bringing their properties back into productive use.