When it comes to owning commercial property, there are many costs and expenses that owners must consider. One such expense that often surprises property owners is the rates payable on empty commercial property. Empty commercial properties are subject to business rates, which are a tax levied on non-domestic properties by local authorities in the UK. In this article, we will explore the rates payable on empty commercial property and how property owners can navigate this aspect of property ownership.
Business rates are a form of tax that is based on the rental value of commercial properties. The rates payable on empty commercial property are a source of frustration for many property owners, as they must pay the tax even when the property is unoccupied. This can make owning empty commercial property financially challenging, as owners must pay taxes on a property that is not generating any income.
The rates payable on empty commercial property were introduced to discourage property owners from leaving their properties vacant for extended periods of time. The thinking behind this tax is that empty commercial properties can be detrimental to the surrounding area, as they can become run-down and attract anti-social behavior. By imposing rates on empty commercial properties, local authorities hope to encourage property owners to bring their properties back into use or sell them to someone who will.
The rates payable on empty commercial property are calculated based on the rateable value of the property. The rateable value is an estimate of the annual market rent that the property could command if it were to be let on the open market. The Valuation Office Agency (VOA) is responsible for assessing the rateable value of commercial properties in England, while the Scottish Assessors Association carries out this role in Scotland.
Property owners can find out the rateable value of their properties by contacting the VOA or the Scottish Assessors Association. Once the rateable value is known, property owners can use this figure to calculate the rates payable on their empty commercial property. The rates payable are determined by multiplying the rateable value by the national non-domestic multiplier, which is set by the government each year.
It is worth noting that there are some exemptions and reliefs available for empty commercial properties. For example, properties with a rateable value of less than £2,900 are exempt from business rates altogether. Additionally, properties that are empty for a short period of time may qualify for a three-month exemption from rates. Property owners should research the available exemptions and reliefs to see if they qualify for any assistance with their rates payable on empty commercial property.
Property owners may also be able to apply for a rates relief scheme, which can provide financial assistance with the rates payable on empty commercial property. Local authorities offer different relief schemes, so it is important to contact the relevant council to see what options are available. Property owners should be prepared to provide evidence of their financial situation and, in some cases, a business plan outlining their intentions for the property.
In some cases, property owners may decide to challenge the rateable value of their properties if they believe it has been assessed incorrectly. This process can be complex and time-consuming, but if successful, it can result in a lower rateable value and reduced rates payable on the empty commercial property. Property owners should seek advice from a professional surveyor or valuer before embarking on a challenge to ensure they have the best chance of success.
In conclusion, the rates payable on empty commercial property can be a significant financial burden for property owners. However, by understanding how these rates are calculated and exploring the available exemptions and reliefs, property owners can take steps to manage this aspect of property ownership. It is important for property owners to stay informed about the rates payable on their empty commercial property and to seek advice and assistance when needed. With careful planning and proactive management, property owners can navigate the rates payable on empty commercial property and ensure their properties remain a valuable asset.