When it comes to owning a commercial property, there are many factors that need to be considered One of the most important things that property owners need to be aware of is the business rates that are associated with their building Business rates are a tax that is charged on most non-domestic properties, including shops, offices, pubs, warehouses, and factories However, did you know that even if a commercial property is empty, the owner is still liable to pay business rates? In this article, we will explore the implications of business rates on empty commercial property and discuss what property owners can do to mitigate the costs.
Business rates are a significant expense for commercial property owners, and they are calculated based on the rateable value of the property The rateable value is assessed by the Valuation Office Agency (VOA) and is used to determine how much business rates need to be paid If a property is empty, the owner is still required to pay business rates for the first three months that the property is vacant After this initial three-month period, the owner is required to pay 100% of the business rates, unless the property qualifies for an exemption.
Exemptions for empty commercial property are limited, and they are only granted in specific circumstances For example, if a property is in need of major repair or reconstruction, the owner may be eligible for a temporary exemption from paying business rates However, this exemption is only granted for a limited period of time, and the owner will still be required to pay business rates once the property is back in use Additionally, properties with a rateable value of less than £2,900 are eligible for small business rate relief, which can provide some relief on the amount of business rates that need to be paid.
The issue of business rates on empty commercial property has been a controversial topic in recent years, as property owners have argued that the current system is unfair and places an unnecessary financial burden on them Many property owners have called for reform of the business rates system to make it fairer and more flexible for owners of empty properties Some have suggested introducing a system where business rates are only payable if a property is occupied, or reducing the rateable value of a property when it is empty to reflect the fact that it is not generating any income.
In response to these concerns, the government has made some changes to the business rates system to provide relief for owners of empty commercial property business rates empty commercial property. For example, in 2017, the government announced that they would be reducing the rateable value threshold at which empty properties are exempt from paying business rates from £2,600 to £2,900 This change was welcomed by property owners, as it meant that more properties would be eligible for small business rate relief and would receive a reduction in the amount of business rates that need to be paid.
Despite these changes, the issue of business rates on empty commercial property continues to be a concern for many property owners The costs of paying business rates on empty properties can be significant, especially for owners of larger properties with high rateable values In some cases, property owners may struggle to find tenants for their empty properties or may be unable to afford the costs of refurbishing or repairing the property to make it more attractive to potential tenants.
So, what can property owners do to mitigate the costs of paying business rates on empty commercial property? One option is to explore the exemptions and reliefs that are available to them Property owners should check with their local council to see if their property is eligible for any exemptions or relief schemes, such as small business rate relief They should also consider whether their property qualifies for any other exemptions, such as properties that are undergoing major renovation or properties that are designated as listed buildings.
Another option for property owners is to consider leasing their empty property to charitable organizations Properties that are occupied by registered charities are eligible for an 80% discount on business rates, which can help to reduce the costs for property owners significantly By leasing their property to a charitable organization, property owners can not only benefit from the relief on business rates but also contribute to a good cause and support the work of local charities.
In conclusion, business rates on empty commercial property can be a significant financial burden for property owners While the government has made some changes to provide relief for owners of empty properties, more needs to be done to make the system fairer and more flexible Property owners should explore the exemptions and reliefs that are available to them and consider leasing their property to charitable organizations to reduce the costs of paying business rates By taking these steps, property owners can alleviate some of the financial pressures associated with owning an empty commercial property and make the most of their investment.