Empty commercial properties can be a headache for owners. Whether it’s due to a struggling economy, changing consumer behaviors, or other market factors, vacant businesses can pose a financial burden. One significant cost that owners of empty commercial properties face is rates on the property. In this article, we will explore what rates on empty commercial property entail and how owners can navigate this challenge.
Rates on empty commercial properties refer to the taxes that owners must pay on properties that are not generating any income. These rates are based on the property’s rateable value, which is an estimate of the property’s rental value at a given point in time. In the UK, rateable values are assessed by the Valuation Office Agency (VOA) and are used to calculate business rates, which are taxes paid by businesses on most non-residential properties.
Owners of empty commercial properties are still required to pay these business rates, even if the property is not in use. This can be a significant financial burden, especially for owners who are already facing challenges due to vacancy or economic downturns. However, there are certain exemptions and relief schemes that owners can take advantage of to mitigate the impact of rates on empty commercial properties.
One such relief scheme is the Empty Property Rate Relief, which allows owners of empty commercial properties to claim relief on their business rates for a certain period of time. In England, for example, owners of empty industrial properties can claim relief for the first three months, and owners of empty offices and retail properties can claim relief for the first six months. This relief can provide owners with some breathing room as they work to bring in tenants or find other ways to generate income from their properties.
Another option for owners of empty commercial properties is the Business Rates Retail Discount, which provides a discount on business rates for occupied retail properties. While this scheme does not directly apply to empty properties, owners may be able to take advantage of it once the property is occupied by a retail tenant. This can help offset some of the costs associated with rates on empty commercial properties once the property is generating income again.
In addition to relief schemes, owners of empty commercial properties can also take steps to reduce their rateable value, which can in turn lower their business rates. For example, owners can appeal their rateable value to the VOA if they believe it is too high. This can involve providing evidence of rental values in the area, changes to the property, or other factors that may affect the property’s rateable value.
Owners can also explore other ways to generate income from their empty commercial properties, such as renting out the property for short-term uses, hosting events, or even selling the property altogether. By diversifying their revenue streams, owners can not only offset the costs of rates on empty commercial properties but also potentially turn a profit in the long run.
Ultimately, navigating rates on empty commercial properties requires owners to be proactive in seeking relief, reducing their rateable value, and exploring alternative income-generating opportunities. While it can be a challenging and sometimes frustrating process, taking these steps can help owners minimize the financial impact of empty properties and position themselves for success in the future.
In conclusion, rates on empty commercial properties can be a significant financial burden for owners. However, by taking advantage of relief schemes, reducing rateable values, and exploring alternative income-generating opportunities, owners can navigate this challenge and ultimately achieve success with their properties. With the right strategies in place, owners can turn their empty commercial properties into profitable investments.