empty rates commercial property, often referred to as vacant property rates, is a significant concern for property owners and businesses alike. In this article, we will delve into what empty rates are, how they are calculated, and what steps property owners can take to mitigate the financial impact of empty rates on their commercial properties.
empty rates commercial property, also known as business rates, are taxes levied by local authorities on non-residential properties that are vacant for an extended period of time. These rates are intended to incentivize property owners to keep their buildings occupied and prevent them from becoming eyesores or ripe for vandalism. However, empty rates can present a substantial financial burden for property owners, particularly in times of economic downturn or slow market conditions.
Empty rates are typically charged on a daily basis and are calculated based on the rateable value of the property. The rateable value is determined by the Valuation Office Agency (VOA) and is an estimate of the annual rental value of the property. The current multiplier used to calculate business rates in England is 51.2p for the 2021-2022 financial year. This means that for every £1 of rateable value, property owners are charged 51.2p in empty rates per day.
Property owners are exempt from paying empty rates for the first three months that their property is empty. After this initial three-month period, they are required to pay the full rateable value of the property. This can be a substantial expense for property owners, particularly if they own multiple vacant properties or have a large portfolio of commercial properties.
There are, however, steps that property owners can take to mitigate the financial impact of empty rates commercial property. One option is to appeal the rateable value of the property with the VOA. Property owners can provide evidence of market conditions, rental values, and any other relevant information that may support a reduction in the rateable value of their property. If successful, this could result in a lower empty rates bill for the property owner.
Another option is to explore the possibility of temporarily occupying the property with a short-term tenant or using it for a different purpose, such as storage or a pop-up shop. By doing so, property owners can demonstrate to the local authorities that they are actively trying to fill the property and may be eligible for exemptions or reductions in empty rates.
Property owners can also consider negotiating with the local council for a temporary reduction or exemption in empty rates if they can prove that they are actively marketing the property for rent or sale. Councils may be willing to work with property owners on a case-by-case basis to help alleviate the financial burden of empty rates.
It is important for property owners to stay informed about changes in empty rates legislation and any support or relief schemes that may be available to them. By staying proactive and seeking advice from professionals such as chartered surveyors or tax experts, property owners can better navigate the complexities of empty rates commercial property and minimize its financial impact on their businesses.
In conclusion, empty rates commercial property can be a significant financial burden for property owners, particularly in challenging economic conditions. However, by understanding how empty rates are calculated, exploring options for mitigation, and staying informed about relevant legislation and support schemes, property owners can take proactive steps to lessen the impact of empty rates on their commercial properties. By working closely with local authorities and seeking professional advice, property owners can better manage their empty rates obligations and protect the financial health of their businesses.