When a commercial property sits vacant, it can create a financial burden for the owner in the form of rates payable on empty commercial property. These rates, also known as business rates, are a tax that must be paid by the property owner to the local government. Understanding how these rates are calculated and what options are available for reducing them can help property owners navigate this potentially costly situation.
Business rates are a tax that must be paid on most non-domestic properties, including commercial properties such as shops, offices, and warehouses. The rates are calculated based on the rateable value of the property, which is set by the Valuation Office Agency (VOA). The rateable value is an estimate of the property’s rental value on a certain date and is used to determine how much tax the property owner must pay.
When a commercial property is empty, the owner is still required to pay business rates unless they are eligible for an exemption. The rates payable on empty commercial property can be a significant expense, especially for owners who are struggling to find tenants or waiting for renovations to be completed before putting the property back on the market.
There are several ways that property owners can reduce the amount of rates payable on empty commercial property. One option is to apply for an exemption or relief. Properties that are empty for a certain period of time may be eligible for a temporary exemption from business rates. For example, properties that are undergoing major renovations or are in need of repairs may qualify for a relief of up to 50% for the first three months and 100% after that.
Another option for reducing rates payable on empty commercial property is to apply for a hardship relief. This relief is available for property owners who are experiencing financial hardship and are struggling to pay their business rates. Local authorities have the discretion to grant hardship relief on a case-by-case basis, so it is worth contacting them to discuss your situation if you are struggling to pay your rates.
In some cases, property owners may be able to negotiate a reduction in their rates payable on empty commercial property by appealing the rateable value of the property. If you believe that the rateable value is inaccurate or unfair, you can submit an appeal to the VOA. If successful, the rateable value will be adjusted, which could result in a lower tax bill for the property owner.
It is important for property owners to stay informed about changes to business rates and any available reliefs or exemptions. The government periodically reviews the business rates system and may introduce new measures to help property owners manage the cost of rates payable on empty commercial property. By staying up to date with these changes, property owners can take advantage of any available opportunities to reduce their tax liability.
In conclusion, rates payable on empty commercial property can be a significant financial burden for property owners. Understanding how these rates are calculated and exploring options for reducing them can help property owners manage this expense more effectively. By applying for exemptions, negotiating rateable values, and staying informed about changes to the business rates system, property owners can take steps to alleviate the financial strain of rates payable on empty commercial property.