As the owner of a commercial property, it is essential to be aware of the various costs and fees associated with owning and maintaining the property. One such cost that many property owners often overlook is the rates payable on empty commercial property. These rates, also known as business rates, can be a significant financial burden for property owners, especially when the property is vacant.
Business rates are taxes that are levied on non-residential properties in the UK. These 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 annual rental value of the property as of a certain date. The local council then uses this rateable value to calculate the amount of business rates that the property owner is required to pay.
When a commercial property is empty, property owners are still required to pay business rates on the property. This can be a source of frustration for property owners, as they are effectively being taxed on a property that is not generating any income. However, there are some exemptions and reliefs available to help alleviate the financial burden of paying rates on empty commercial property.
One common exemption that property owners may be eligible for is the empty property relief. This relief is available for commercial properties that are empty for a certain period of time. The amount of relief that is available varies depending on the location of the property and the local council’s policy. In some cases, property owners may be eligible for 100% relief for a limited period, usually ranging from three to six months.
Another form of relief that property owners may be eligible for is the small business rate relief. This relief is available for businesses that occupy only one property with a rateable value below a certain threshold. Property owners who qualify for this relief may be eligible for a discount on their business rates bill.
It is important for property owners to be proactive in applying for these reliefs and exemptions. Failure to do so could result in unnecessarily high business rates bills, which can put a strain on the property owner’s finances. Property owners should also be aware that the rules and regulations surrounding business rates can be complex and subject to change. It is advisable to seek advice from a qualified professional, such as a chartered surveyor or tax advisor, to ensure compliance with all applicable laws and regulations.
In some cases, property owners may consider renting out their empty commercial property to generate income and avoid paying business rates on the property. However, this approach may not always be feasible, especially in a challenging economic environment or a competitive rental market. Property owners should carefully weigh the benefits and risks of renting out their property before making a decision.
In conclusion, rates payable on empty commercial property can be a significant financial burden for property owners. It is important for property owners to be aware of the various reliefs and exemptions that are available to help alleviate this burden. By understanding the rules and regulations surrounding business rates, property owners can take proactive steps to minimize their tax liabilities and protect their financial interests.