When it comes to owning commercial property, there are a variety of costs that one must consider in addition to the initial purchase price. One of these costs is the rates payable on empty commercial property. These rates, also known as business rates, are taxes that are paid on non-residential properties such as offices, shops, warehouses, and factories. In this article, we will delve into the intricacies of rates payable on empty commercial property and explore how they can impact property owners.
Business rates are a crucial source of revenue for local authorities, as they help fund essential services such as schools, roads, and waste management. These rates are based on the rateable value of a property, which is an estimate of the property’s open market rental value as of a specific date. The rateable value is determined by the Valuation Office Agency (VOA) in England, the Scottish Assessors in Scotland, and the Land and Property Services in Northern Ireland. Property owners can find out the rateable value of their property by visiting the relevant government website.
In some cases, properties may be exempt from paying business rates. For example, agricultural land and buildings, fish farms, and buildings registered for public religious worship are exempt from business rates. Additionally, certain types of properties may be eligible for business rates relief, such as small businesses, charities, and community amateur sports clubs. Property owners should check with their local authority to see if they qualify for any exemptions or relief.
One issue that property owners often face is paying rates on empty commercial property. When a commercial property becomes vacant, the owner is still required to pay business rates on the property. This can be a significant financial burden for property owners, especially if the property remains vacant for an extended period of time. To alleviate this burden, the government has introduced certain measures to help property owners with rates on empty commercial property.
One such measure is the empty property relief scheme, which allows property owners to receive a 100% discount on their business rates for a specified period of time. In England, properties are exempt from paying business rates for the first three months that they are empty. After three months, industrial properties are eligible for a 100% discount for a further three months, while other non-industrial properties receive a 100% discount for an additional six months. In Scotland and Wales, properties receive a 100% discount on their business rates for the first six months that they are empty.
In addition to the empty property relief scheme, there are other ways in which property owners can reduce the amount of rates payable on empty commercial property. For example, owners can apply for transitional relief, which allows them to spread out any increases in their business rates bill over a number of years. Property owners can also consider appealing the rateable value of their property if they believe it is too high. By appealing the rateable value, property owners may be able to reduce the amount of rates they are required to pay.
Overall, rates payable on empty commercial property can be a significant financial burden for property owners. However, there are measures in place to help alleviate this burden, such as the empty property relief scheme and transitional relief. Property owners should be aware of these options and take advantage of them where possible to reduce the amount of rates payable on their empty commercial property. By being proactive and exploring all available options, property owners can minimize the impact of business rates on their finances and better manage their commercial properties.