empty rates commercial property, also known as business rates or non-domestic rates, can be a significant financial burden for property owners. These rates are charged on most non-residential properties in the UK, including shops, offices, warehouses, and factories. Understanding how empty rates work and how they can impact your bottom line is essential for any commercial property owner.
Empty rates are charged on properties that are unoccupied for an extended period of time. The rates are intended to incentivize property owners to keep their properties occupied and in use. While the exact rules can vary depending on the specific circumstances, in general, properties that have been unoccupied for more than three months are subject to empty rates.
The amount of empty rates that a property owner must pay is based on the rateable value of the property. The rateable value is set by the local government and is used to calculate the amount of business rates that must be paid when the property is occupied. When a property becomes empty, the owner is still required to pay a percentage of the standard business rates based on the rateable value.
For properties that have been empty for less than three months, the owner is still required to pay the full amount of business rates. However, once the property has been empty for three months or more, the owner is eligible for a discount on the amount of empty rates that must be paid. In some cases, the discount can be as much as 100%, meaning that the property owner is not required to pay any empty rates at all.
It’s important to note that there are some exceptions to the empty rates rules. Certain types of properties, such as industrial properties, are exempt from empty rates for a specified period of time. Additionally, properties that are undergoing major refurbishment or redevelopment may also be exempt from empty rates. Property owners should check with their local government to determine if any exemptions apply to their specific situation.
Property owners who are struggling to pay empty rates on their commercial properties may be eligible for financial assistance. The government offers a variety of relief schemes to help property owners reduce the burden of empty rates. These schemes include discounts for newly built properties, hardship relief for properties that are experiencing financial difficulties, and charitable relief for properties that are used for charitable purposes.
In addition to relief schemes, property owners can take steps to minimize the amount of empty rates that they are required to pay. One effective strategy is to occupy the property with a temporary tenant while searching for a long-term tenant. By doing so, the property owner can avoid or reduce the amount of empty rates that must be paid. Property owners can also consider renting out the property for short-term events or storage purposes to generate income and offset the cost of empty rates.
Another option for property owners is to appeal the rateable value of their property. If the property owner believes that the rateable value is incorrect, they can submit an appeal to the local government. If successful, the rateable value will be adjusted, resulting in lower business rates and empty rates. Property owners should consult with a professional valuation expert to determine if an appeal is worth pursuing.
In conclusion, empty rates commercial property can be a significant financial burden for property owners. Understanding how empty rates work and how they can impact your bottom line is essential for any commercial property owner. By taking advantage of relief schemes, minimizing empty periods, and appealing the rateable value of their property, property owners can reduce the amount of empty rates that they are required to pay.