Empty commercial properties can be a headache for property owners, not only in terms of potential loss of rental income but also due to the rates payable on these properties Rates payable on empty commercial properties are a concern for many property owners, and understanding how these rates are calculated and what options are available can help alleviate some of the financial burden.
In most jurisdictions, commercial properties are subject to business rates, which are taxes paid on non-residential properties These rates are based on the rateable value of the property, which is an estimate of the open market rental value of the property at a specific date The local authority or government agency responsible for collecting business rates assesses the rateable value of each commercial property within its jurisdiction and applies a set rate to calculate the rates payable.
When a commercial property is empty, the liability for paying business rates falls on the property owner This can be a significant financial burden, especially if the property remains empty for an extended period In some cases, property owners may be required to pay rates on empty properties even if they are actively marketing the property for rent or sale This is because the property is still deemed to have a rateable value, even if it is not generating any rental income.
However, there are some exemptions and reliefs available to property owners who have empty commercial properties These exemptions and reliefs vary depending on the jurisdiction, but common examples include:
1 Empty property rate relief: Some jurisdictions offer a period of relief from paying business rates on empty commercial properties This relief can range from a few months to a year or more, giving property owners some breathing room to find new tenants or sell the property.
2 Small business rate relief: In some jurisdictions, small businesses occupying commercial properties are eligible for relief on their business rates This relief may also apply to empty properties that would qualify for small business rate relief if they were occupied.
3 Charitable rate relief: Properties occupied by registered charities or other qualifying non-profit organizations may be eligible for relief on their business rates rates payable on empty commercial property. This relief may also apply to empty properties owned by charities.
4 Hardship relief: Property owners facing financial difficulties may be eligible for hardship relief on their business rates This relief is usually granted on a case-by-case basis and requires demonstrating that paying the full rates would cause undue financial hardship.
Property owners should check with their local authority or government agency to see if they qualify for any exemptions or reliefs on their empty commercial properties It is important to apply for these reliefs promptly to avoid unnecessary financial strain.
Another option for property owners with empty commercial properties is to consider leasing the property to a charity or non-profit organization As mentioned earlier, properties occupied by charities may be eligible for relief on business rates, so leasing the property to a charity could help reduce the rates payable on the property This can be a win-win situation for both the property owner and the charity, as the charity gets a space to operate, and the property owner gets relief on their business rates.
Property owners should also consider other strategies for mitigating the rates payable on empty commercial properties For example, they could explore temporary uses for the property, such as pop-up shops, art galleries, or events spaces These temporary uses could generate some income while also potentially reducing the rates payable on the property.
In conclusion, rates payable on empty commercial properties can be a significant financial burden for property owners However, there are exemptions, reliefs, and other strategies available to help alleviate some of this burden Property owners should be proactive in exploring these options and working closely with their local authority or government agency to find the best solution for their empty commercial properties By taking the time to understand the rates payable on empty commercial properties and exploring all available options, property owners can better manage the financial impact of having empty properties in their portfolio.