When it comes to owning commercial property, there are various costs and expenses that come with it. One of the expenses that can catch some property owners off guard is the business rates on empty commercial property. These rates are often overlooked, but they can significantly impact your overall investment if not managed properly. In this article, we will discuss what business rates on empty commercial property are, how they are calculated, and some tips on how property owners can handle them to maximize their investment.
Business rates, also known as non-domestic rates, are charges imposed on most non-domestic properties in the UK. This includes properties used for commercial, industrial, or public purposes. The rates are calculated based on the rateable value of the property, which is assessed by the Valuation Office Agency (VOA). The rateable value represents the annual rental value of the property if it were available to let on the open market.
The government uses the rateable value to calculate the amount of business rates that a property owner will need to pay. The rates are set by the local council and can vary depending on the location and type of property. However, one of the significant challenges for property owners is dealing with business rates on empty commercial property. When a property is empty, the owner is still liable to pay business rates until the property is occupied again.
This can be a significant financial burden for property owners, especially if the property remains vacant for an extended period. However, there are some ways that property owners can manage business rates on empty commercial property to minimize their impact on their investment. Here are some tips to help property owners navigate this challenge:
1. Apply for Empty Property Rate Relief: Property owners can apply for Empty Property Rate Relief, which can provide a 100% discount on business rates for a limited period. The relief period varies depending on the type of property, but it can provide some much-needed financial relief for property owners with empty commercial properties. Property owners should check with their local council to see if they are eligible for this relief and how to apply for it.
2. Consider Temporary Uses for the Property: Another way to manage business rates on empty commercial property is to consider temporary uses for the property. Property owners can look into renting out the property for short-term events or pop-up shops to generate some income and potentially qualify for relief on the business rates. This can also help to maintain the property and prevent it from deteriorating while it is vacant.
3. Negotiate with the Local Council: Property owners can also try to negotiate with the local council to reduce the business rates on empty commercial property. Councils have the discretion to offer discretionary rate relief in certain circumstances, such as economic hardship or structural changes in the area. Property owners should provide evidence to support their case and engage in open communication with the council to reach a mutually beneficial solution.
4. Explore Redevelopment Opportunities: If the property has been vacant for an extended period and is not suitable for temporary uses, property owners may want to consider redevelopment opportunities. This can involve converting the property into a different use or refurbishing it to attract new tenants. By investing in the property, property owners can increase its value and potentially reduce the business rates in the long run.
5. Seek Professional Advice: Dealing with business rates on empty commercial property can be complex, so property owners may want to seek professional advice from a chartered surveyor or property consultant. These professionals can help property owners navigate the regulations and processes involved in managing business rates and provide guidance on the best strategies to minimize the impact on their investment.
In conclusion, managing business rates on empty commercial property requires proactive planning and strategic decision-making. Property owners should be aware of their obligations and explore all available options to minimize the financial burden of empty property rates. By following these tips and seeking professional advice, property owners can maximize their investment and ensure the long-term success of their commercial property.