When it comes to owning commercial property, there are a variety of expenses that property owners must consider. One of the significant costs that owners of empty commercial properties must account for is rates on the property. rates on empty commercial property can be a considerable financial burden for property owners, and understanding how these rates are calculated and what options are available to reduce or eliminate them is crucial.
rates on empty commercial property are referred to as non-domestic rates or business rates in the United Kingdom. These rates are a tax on non-residential properties, including commercial properties such as offices, shops, warehouses, and industrial units. The amount of rates payable on empty commercial property is determined by the rateable value of the property, which is assessed by the local council.
The rateable value of a property is an estimate of its open market rental value as of a specific date, known as the antecedent valuation date. The valuation is carried out by the Valuation Office Agency (VOA) in England, the Scottish Assessors in Scotland, or the Valuation and Lands Agency in Northern Ireland. Once the rateable value is determined, the local council applies a multiplier, known as the national non-domestic multiplier, to calculate the rates payable.
For empty commercial properties, the rates payable are usually based on 100% of the rateable value. This means that owners of empty commercial properties are required to pay rates on the property even if they are not generating any rental income from it. This can be a significant financial burden for property owners, especially in cases where the property has been vacant for an extended period.
There are, however, some options available to property owners to reduce or eliminate the rates payable on empty commercial property. One option is to apply for an exemption or relief from rates. For example, owners of newly built properties may be eligible for an exemption from rates for a specified period. Similarly, owners of properties undergoing substantial renovation or repair works may be able to apply for relief from rates during the works.
Another option for reducing rates on empty commercial property is to apply for temporary or short-term relief schemes that may be offered by the local council. These schemes are typically introduced to stimulate economic activity in specific areas or sectors and may provide a discount or exemption from rates for a limited period. Property owners should check with their local council to see if any such schemes are available in their area.
In some cases, property owners may also be able to negotiate a reduction in rates with the local council. This could involve providing evidence of the property’s market value, rental potential, or other factors that may impact the rateable value. Property owners should be prepared to present a strong case to the local council and provide supporting documentation to support their claim for a reduction in rates.
It is essential for property owners to be proactive in managing rates on empty commercial property to avoid unnecessary financial strain. Owners should keep abreast of any changes in legislation or regulations that may affect rates on empty properties and seek professional advice if needed. Hiring a qualified surveyor or property consultant can help property owners navigate the complex process of challenging rateable values and negotiating with the local council.
In conclusion, rates on empty commercial property can be a significant financial burden for property owners, but there are options available to reduce or eliminate these rates. Property owners should be proactive in managing rates on empty properties and explore all available avenues for relief or exemption. By staying informed and seeking professional advice when needed, property owners can navigate the cost of rates on empty commercial property more effectively.