Empty commercial property fees, also known as vacant property rates or empty rates, have become a significant concern for property owners in recent years. These fees are charges imposed by local authorities on commercial properties that have been left unoccupied for an extended period of time. The aim of these fees is to encourage property owners to either occupy or lease out their properties, thus reducing the number of vacant properties in an area.
Empty commercial property fees can have a significant financial impact on property owners, especially those who are struggling to find tenants or are going through a period of renovation or refurbishment. In this article, we will discuss everything you need to know about empty commercial property fees, including how they are calculated, exemptions that may apply, and tips for reducing or avoiding these fees.
How Are empty commercial property fees Calculated?
Empty commercial property fees are typically calculated based on the rateable value of the property. The rateable value is an estimate of the yearly rental value of a property as determined by the Valuation Office Agency (VOA). The amount of empty property rates payable is usually a percentage of the rateable value, with the exact percentage varying depending on the local authority.
In England, for example, empty commercial property rates are generally set at 100% of the rateable value for properties that have been left unoccupied for over three months. In Scotland, the rate is set at 90% after a three-month period, while in Wales, the rate is 100% after a three-month period.
Are There Exemptions for empty commercial property fees?
There are certain exemptions that may apply to empty commercial property fees, which could help property owners reduce or avoid these charges altogether. Some common exemptions include:
1. Industrial properties – Properties that are used primarily for industrial purposes may be eligible for a partial or full exemption from empty property rates.
2. Listed buildings – Listed buildings that are under renovation or refurbishment may be exempt from empty property rates for a specified period of time.
3. Small properties – Some local authorities offer exemptions for small properties with a rateable value below a certain threshold.
4. Charitable properties – Properties owned by registered charities may be exempt from empty commercial property fees if they are used for charitable purposes.
It is important to check with the local authority to see if any exemptions apply to your property and to provide the necessary documentation to support your claim for exemption.
Tips for Reducing or Avoiding empty commercial property fees
For property owners who are facing empty commercial property fees, there are several strategies that can be employed to reduce or avoid these charges:
1. Lease out the property – The most effective way to avoid empty property rates is to lease out the property to a tenant. Even if the rental income does not cover all costs, it may be more cost-effective than paying empty property rates.
2. Consider temporary uses – Property owners can explore temporary uses for their empty properties, such as pop-up shops, events, or exhibitions. These temporary uses can help generate income and reduce the impact of empty property rates.
3. Renovate or refurbish the property – Investing in the renovation or refurbishment of the property can attract potential tenants and may qualify for exemptions from empty property rates during the construction period.
4. Negotiate with the local authority – Property owners can also try negotiating with the local authority to reduce the empty property rates, especially if they can demonstrate efforts to market the property or bring it back into use.
In conclusion, empty commercial property fees can be a significant burden for property owners, especially in times of economic uncertainty or property market downturns. Understanding how these fees are calculated, exploring exemptions that may apply, and implementing strategies to reduce or avoid these charges can help property owners navigate this challenging aspect of property ownership. By taking proactive steps to address empty commercial property fees, property owners can minimize financial losses and potentially turn vacant properties into valuable assets in the long run.