Business rates can have a significant impact on commercial property owners, especially when the property sits empty. Known as the “business rates empty commercial property,” this tax can be a burden for property owners trying to attract tenants or sell their vacant space. Understanding how these rates are calculated and the potential ways to mitigate their effects is crucial for property owners to navigate this complex aspect of owning commercial property.
Business rates are taxes that are levied on non-domestic properties, such as shops, offices, and warehouses. These rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). The rateable value is then multiplied by the business rates multiplier set by the government to calculate the total amount due.
When a commercial property is empty, property owners may still be liable for business rates, depending on the specific circumstances. In England, the current legislation states that empty commercial properties are exempt from paying business rates for the first three months after vacancy. However, after this initial period, full rates are usually payable, unless the property falls under certain exemptions.
One common exemption for empty commercial properties is called the “Small Business Rate Relief.” This relief applies to properties with a rateable value of £2,900 or less and offers 100% relief for eligible properties. In addition, properties with a rateable value between £2,900 and £12,000 may also qualify for tapered relief.
Another exemption is the “Section 44A Relief,” which applies to properties that are temporarily unoccupied due to structural repairs or undergoing a change in ownership. This relief can last for up to 12 months and can be extended in certain cases. Property owners must inform the local council of the reasons for the property being empty to qualify for this relief.
Despite these exemptions, many commercial property owners still find themselves burdened with business rates on empty properties. This can be particularly challenging for owners who are actively trying to market and lease their vacant space but are struggling to find tenants. Paying full business rates on a property that is not generating income can put a strain on the owner’s finances and hinder their ability to invest in the property or make necessary improvements.
To mitigate the impact of business rates on empty commercial property, there are several strategies that property owners can consider. One option is to explore available relief schemes and exemptions that may apply to their specific situation. Seeking professional advice from a surveyor or accountant can help property owners navigate the complex regulations surrounding business rates and identify potential cost-saving opportunities.
Another strategy is to consider temporary uses for the empty property that may qualify for relief or reduced rates. For example, offering the space for community events, pop-up shops, or art exhibitions can help generate some income while also potentially qualifying for relief under certain schemes. Property owners should consult with their local council to explore these possibilities and determine the best course of action.
Property owners may also consider negotiating with the local council for a reduction or deferment of business rates on their empty property. Councils have the discretion to offer discretionary relief in certain cases, especially if the property owner can demonstrate efforts to market the property or bring it back into use. Building a strong case and presenting a detailed plan for the property’s future use may increase the chances of securing relief from the council.
In conclusion, the impact of business rates on empty commercial property can be a significant challenge for property owners. Understanding the regulations surrounding business rates and exploring available relief schemes is crucial for mitigating the financial burden of vacant property. By seeking professional advice, exploring temporary uses for the property, and negotiating with the local council, property owners can navigate this complex issue and work towards maximizing the potential of their commercial property.