When it comes to empty commercial property, one of the biggest financial burdens that property owners face is business rates. These rates are set by the government and are meant to be a tax on non-residential properties. However, for empty commercial properties, the issue of business rates becomes even more crucial as property owners must still pay these rates even when their property is not generating any income. In this article, we will explore the complexities of business rates for empty commercial property and provide some tips on how property owners can navigate this financial burden.
Business rates for empty commercial property are calculated based on the rateable value of the property. The rateable value is determined by the Valuation Office Agency (VOA) and is based on the estimated rental value of the property. The amount of business rates that property owners must pay is calculated by multiplying the rateable value by the multiplier set by the government.
One of the key issues that property owners face when it comes to business rates for empty commercial property is that they must still pay these rates even when the property is not in use. This can be a significant financial burden, especially for property owners who are struggling to find tenants for their empty properties. In some cases, property owners may even be forced to sell their properties at a loss in order to alleviate the financial strain of paying business rates for an empty property.
There are, however, some exemptions and reliefs available for property owners with empty commercial properties. For example, properties with a rateable value of less than £2,600 are exempt from paying business rates. Additionally, for the first three months that a property is empty, property owners are entitled to a 100% relief on their business rates. After this initial three-month period, the relief drops to 50% for most properties, although some properties may be eligible for extended relief.
Property owners can also apply for hardship relief if they can demonstrate that paying business rates would cause them undue financial hardship. This relief is granted at the discretion of the local council and is intended to provide temporary relief for property owners who are struggling financially.
In addition to exemptions and reliefs, property owners can also take steps to mitigate their business rates liability for empty commercial property. One option is to refurbish the property in order to increase its rateable value. By investing in improvements to the property, property owners may be able to attract tenants and generate income, thereby reducing their business rates liability.
Another option is to consider appealing the rateable value of the property with the VOA. Property owners have the right to challenge the rateable value of their property if they believe it is inaccurate. By providing evidence of similar properties in the area with lower rateable values, property owners may be able to successfully reduce their business rates liability.
Property owners can also explore the option of leasing the property on a short-term basis in order to generate income and reduce their business rates liability. Short-term leases can be a viable option for property owners who are struggling to find long-term tenants for their empty properties. By generating income through short-term leases, property owners can offset some of the costs of business rates for empty commercial property.
Overall, navigating the complexities of business rates for empty commercial property can be a challenging task for property owners. However, by exploring exemptions and reliefs, investing in property improvements, appealing rateable values, and considering short-term leases, property owners can take steps to alleviate the financial burden of paying business rates for empty commercial property. With careful planning and strategic decision-making, property owners can successfully manage their business rates liability and protect their financial interests in the competitive world of commercial real estate.
In conclusion, ‘business rates empty commercial property‘ remains a significant financial burden for property owners with empty commercial properties. By understanding the calculations of business rates, exploring available exemptions and reliefs, and taking strategic actions to mitigate their liability, property owners can navigate the complexities of business rates and protect their financial interests.