Understanding Rates Payable On Empty Commercial Property

When it comes to owning commercial property, there are many aspects to consider in terms of costs. One important factor to keep in mind is the rates payable on empty commercial property. These rates can add up quickly and significantly impact the finances of property owners. In this article, we will delve into what rates payable on empty commercial property are, how they are calculated, and what property owners can do to mitigate these costs.

rates payable on empty commercial property, also known as empty property rates or vacant property rates, are essentially taxes that property owners are required to pay on commercial properties that are unoccupied. The idea behind these rates is to encourage property owners to utilize their properties and prevent them from leaving properties empty for extended periods of time. This helps promote economic growth, as well as deter property owners from keeping properties vacant for speculative purposes.

The rates payable on empty commercial property are calculated based on the rateable value of the property. The rateable value is determined by the Valuation Office Agency (VOA) in England, the Scottish Assessors in Scotland, and the Land and Property Services in Northern Ireland. This value is used as the basis for calculating business rates, including rates payable on empty commercial property.

In England, the rates payable on empty commercial property are as follows:

– Properties that have been empty for less than three months are exempt from empty property rates.
– Properties that have been empty for more than three months but less than six months are subject to full rates.
– Properties that have been empty for more than six months are subject to an additional 100% charge on top of the full rates.

In Scotland, the rates payable on empty commercial property are slightly different:

– Properties that have been empty for less than three months are exempt from empty property rates.
– Properties that have been empty for more than three months but less than six months are subject to 10% of the normal rates.
– Properties that have been empty for more than six months but less than 12 months are subject to 20% of the normal rates.
– Properties that have been empty for more than 12 months are subject to 50% of the normal rates.

In Northern Ireland, the rates payable on empty commercial property are similar to those in England. Properties that have been empty for more than three months are subject to 100% charges in addition to the normal rates.

It is important for property owners to keep track of the vacancies in their commercial properties and the corresponding rates payable on empty property. Failure to pay these rates can result in penalties and legal consequences. Additionally, property owners should be aware of any exemptions or reliefs that may apply to their specific circumstances.

There are several strategies that property owners can employ to mitigate the impact of rates payable on empty commercial property. One common tactic is to temporarily let out the property for a short period to reset the clock on the empty property rates. This can help property owners avoid the additional charges that come with extended vacancies.

Another option is to consider applying for empty property rate relief. In some cases, property owners may be eligible for relief from empty property rates for a certain period of time if they can demonstrate that they are actively seeking tenants or making efforts to bring the property back into use.

Property owners can also explore the possibility of using the property for alternative purposes while they look for tenants. This could include temporary uses such as pop-up shops, art exhibitions, or event spaces. Not only can this generate some income for the property owner, but it can also help to attract potential tenants to the property.

In conclusion, rates payable on empty commercial property can be a significant financial burden for property owners. Understanding how these rates are calculated and exploring options for mitigating these costs are essential for managing the financial implications of owning vacant commercial properties. By staying informed and proactive, property owners can navigate the complexities of empty property rates and make informed decisions to protect their investments.