When it comes to owning commercial property, one of the often-overlooked costs is business rates on empty properties. Business rates are a tax imposed by the government on non-residential properties like shops, offices, and warehouses. And when a commercial property sits empty, the owner is still required to pay business rates, which can be a significant financial burden. In this article, we will explore the intricacies of business rates on empty commercial property and provide some tips on how to navigate this often challenging aspect of property ownership.
Business rates are calculated based on the rateable value of a property, which is determined by the Valuation Office Agency (VOA). The rateable value is essentially an estimate of how much rent the property could fetch on the open market. The local council uses this rateable value to calculate the business rates due on a property. In England, the standard multiplier for business rates is set by the government each year, and this multiplier is applied to the rateable value to determine the final amount owed.
When a commercial property becomes empty, the owner is still required to pay business rates for the property. However, the owner may be eligible for a rate relief scheme, depending on the circumstances. For example, small business rate relief is available for properties with a rateable value below a certain threshold. There is also an empty property relief scheme that provides a discount on business rates for properties that have been vacant for a certain period of time.
One of the key challenges of owning empty commercial property is the financial burden of paying business rates on a property that is not generating any income. This can be particularly problematic for property owners who are struggling to find tenants or buyers for their empty properties. In some cases, the cost of business rates on an empty property can outweigh any potential rental income, making it a drain on the owner’s finances.
There are several strategies that property owners can employ to mitigate the impact of business rates on empty commercial property. One option is to explore the various rate relief schemes available. By taking advantage of these schemes, property owners can reduce the amount of business rates they are required to pay on their empty properties. This can help to alleviate some of the financial strain associated with owning empty commercial property.
Another strategy is to actively market the property to attract potential tenants or buyers. By effectively advertising the property and showcasing its potential, property owners may be able to secure a tenant or buyer more quickly, thereby reducing the amount of time the property sits empty and the owner is required to pay business rates.
Property owners can also consider seeking professional advice from a surveyor or property consultant. These professionals can provide valuable insights and guidance on how to navigate the complexities of business rates on empty commercial property. They can help property owners understand their options and develop a strategy to minimize the financial impact of business rates on their empty properties.
In conclusion, business rates on empty commercial property can be a significant financial burden for property owners. However, by understanding the intricacies of business rates and exploring options for rate relief, property owners can mitigate the impact of empty property rates. By actively marketing the property and seeking professional advice, property owners can navigate this challenging aspect of property ownership and work towards finding a solution that works for their unique circumstances.