When a commercial property sits empty, owners often face various challenges, including financial ones. One such challenge is the rates payable on empty commercial property, which can add financial strain to the situation. These rates, also known as business rates, are taxes that property owners must pay to their local council. In this article, we will explore the ins and outs of rates payable on empty commercial property and how property owners can navigate this aspect of property ownership.
Business rates are a tax on business properties that are used to help fund local services. These rates are based on the rateable value of the property, which is determined by the Valuation Office Agency. The rates are set by the government and collected by local councils. They are calculated by multiplying the rateable value of the property by the multiplier set by the government. The multiplier can vary depending on the location of the property and other factors.
When a commercial property is empty, the rates payable on the property can become a burden for the owner. In some cases, owners may be eligible for a discount on the rates payable on empty commercial property. However, this discount is subject to certain conditions and time limits. For example, in England, owners of empty commercial properties are eligible for a 100% discount on their business rates for the first three months the property is empty. After the initial three-month period, the rateable value of the property is reduced by 100% for a further three months, followed by a 10% reduction for the remainder of the time the property remains empty.
In addition to the discount on rates payable on empty commercial property, owners may also be exempt from paying business rates altogether in certain circumstances. For example, listed buildings are exempt from paying business rates, as are certain properties that are used for charitable purposes. It is important for property owners to check with their local council to see if they qualify for an exemption or a discount on their rates payable on empty commercial property.
Property owners who are struggling to pay their rates on empty commercial property may also be able to negotiate a payment plan with their local council. This can help spread out the cost of the rates over a longer period of time, making it more manageable for owners who are facing financial difficulties. It is important for owners to communicate with their local council and seek assistance if they are struggling to pay their rates on empty commercial property.
Another option for property owners facing high rates payable on empty commercial property is to consider leasing or selling the property. By leasing the property, owners can generate income that can help offset the cost of the rates. Similarly, selling the property can relieve owners of the burden of paying rates on an empty property. It is important for owners to weigh the pros and cons of leasing or selling their property and consider which option is best for their individual situation.
In conclusion, rates payable on empty commercial property can be a significant financial burden for property owners. Understanding the rules and regulations surrounding business rates can help owners navigate this aspect of property ownership more effectively. By exploring options such as discounts, exemptions, payment plans, leasing, or selling, property owners can find ways to manage the cost of rates on empty commercial property. It is important for owners to communicate with their local council and seek guidance if they are struggling to pay their rates. By taking proactive steps, property owners can alleviate the financial strain of rates payable on empty commercial property and make informed decisions about their property holdings.