rates payable on empty commercial property, also known as business rates, can often be a source of frustration for property owners. These rates are a tax imposed by local authorities on commercial properties that are not being used or occupied. The aim of these rates is to encourage property owners to make use of their properties, as well as to generate revenue for local councils.
The rates payable on empty commercial property can vary depending on the size, location, and type of property. These rates can often be a significant financial burden for property owners, especially if the property remains empty for an extended period of time. Understanding how these rates are calculated and what exemptions are available can help property owners navigate this aspect of owning commercial property.
Business rates are usually based on the rateable value of a property. The rateable value is an estimate of the annual rent that the property could fetch on the open market. This value is assessed by the Valuation Office Agency (VOA) and is used by local councils to calculate the rates payable by property owners. The rates payable are calculated as a percentage of the rateable value, known as the multiplier.
In England, the standard multiplier is set by the government and is reviewed each year. For the 2021/2022 financial year, the standard multiplier is set at 51.2 pence in the pound. This means that property owners will pay 51.2% of the rateable value of their property in business rates. However, there are additional multipliers for certain types of properties, such as those in London and properties with a rateable value above a certain threshold.
Property owners may be eligible for exemptions or reliefs on their business rates if their property is empty. In England, empty commercial properties with a rateable value below £2,900 are exempt from business rates. This exemption applies for the first three months that a property is empty, after which the full rates become payable. In addition, some properties may be eligible for other reliefs, such as small business rate relief or rural rate relief.
It is important for property owners to keep track of their business rates and any exemptions or reliefs that they may be eligible for. Failure to pay business rates on an empty commercial property can result in penalties and legal action by the local council. Property owners should contact their local council or a qualified advisor to discuss their business rates and any potential exemptions.
There are also ways in which property owners can reduce the burden of business rates on empty commercial properties. One option is to lease the property to a charity or a community amateur sports club. Properties leased to these organizations may be eligible for an 80% discount on their business rates. Another option is to apply for temporary rate relief, which can provide relief on the rates payable for a limited period of time.
Property owners should also consider the implications of leaving a property empty for an extended period of time. In some cases, long-term empty properties may attract additional charges or penalties from the local council. Property owners should weigh the financial costs of keeping a property empty against the potential benefits of leasing or selling the property.
In conclusion, rates payable on empty commercial property can be a significant financial burden for property owners. Understanding how these rates are calculated, what exemptions are available, and how to reduce the burden of business rates can help property owners navigate this aspect of owning commercial property. Property owners should keep track of their business rates, explore potential exemptions and reliefs, and consider the implications of leaving a property empty for an extended period of time. By staying informed and taking proactive steps, property owners can manage the rates payable on their empty commercial properties effectively.