empty rates commercial property, also known as vacant rates or business rates, can be a significant financial burden on property owners. In the United Kingdom, empty rates are charged on commercial properties that have been empty for a certain period of time. These rates are calculated based on the rateable value of the property and can add up to thousands of pounds per year. Understanding how empty rates are calculated and how you can mitigate your liability is essential for property owners.
The empty rates legislation was introduced by the UK government to encourage property owners to bring vacant commercial properties back into use. However, the empty rates can be a headache for property owners who are unable to find tenants or need to keep their property empty for renovation or other reasons. It is important to understand how empty rates are calculated and what options are available to reduce the financial impact.
Empty rates are 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 VOA uses a set of criteria to calculate the rateable value, including the size, location, and condition of the property. Once the rateable value is determined, the property owner is required to pay a percentage of this value in empty rates.
The rate of empty rates can vary depending on the specific circumstances of the property. For example, properties that have been empty for less than three months are exempt from empty rates. After this initial period, the property owner is required to pay 100% of the empty rates for the next three months. After six months, the empty rates increase to 200% of the usual rate. This can be a significant financial burden for property owners, particularly if they are struggling to find a tenant or are unable to use the property for any reason.
There are some options available to property owners who are facing high empty rates bills. One option is to apply for an exemption or relief from empty rates. There are certain circumstances in which property owners may be eligible for relief, such as if the property is undergoing renovation or if it is part of a wider redevelopment scheme. Property owners can also apply for temporary exemption if they can prove that they are actively marketing the property for rent or sale.
Another option for property owners facing high empty rates bills is to consider renting the property out on a temporary basis. By finding a short-term tenant, property owners can reduce their liability for empty rates and generate some income from the property. This can be a practical solution for property owners who are struggling to find a long-term tenant or need to generate some income while they wait for a sale or redevelopment.
Property owners can also consider appealing the rateable value of the property if they believe it has been calculated incorrectly. The VOA can review the rateable value of the property and make adjustments if necessary. Property owners can also seek professional advice from a surveyor or property expert to help them navigate the empty rates legislation and find the best solution for their specific circumstances.
In conclusion, empty rates commercial property can be a significant financial burden for property owners. Understanding how empty rates are calculated and what options are available to reduce the liability is essential for property owners. By exploring options such as exemptions, temporary rentals, and rateable value appeals, property owners can mitigate the impact of empty rates and find a solution that works for them.