When it comes to owning or leasing commercial property, there are many factors to consider in order to maximize value and profitability. One aspect that property owners need to be aware of is the issue of business rates on empty commercial property. These rates can have a significant impact on the bottom line and it is important to understand how they are calculated and what options are available to mitigate the financial burden.
Business rates are taxes that are levied on non-domestic properties, including commercial buildings, offices, warehouses, and retail spaces. The rates are set by the government and are based on the rateable value of the property, which is assessed by the Valuation Office Agency (VOA). The rateable value is an estimate of the open market rental value of the property at a specific date, usually every five years.
One of the key concerns for property owners is the issue of business rates on empty commercial property. When a property becomes vacant, the owner is still liable to pay business rates on that property, even though it is not generating any income. This can create a significant financial burden, especially for owners of larger or more expensive properties.
There are, however, some options available to property owners to help reduce the impact of business rates on empty commercial property. One option is to apply for an exemption or reduction in rates. Certain types of properties may be eligible for exemptions, such as buildings that are undergoing major renovations or repairs. Owners may also be able to claim hardship relief if they can demonstrate that the rates are causing financial hardship.
Another option for property owners is to explore the possibility of leasing the property on a short-term basis. By temporarily leasing the property to a temporary tenant, owners can avoid paying the full business rates on the property. This can be a win-win situation for both parties, as the property owner avoids the financial burden of business rates while the temporary tenant gains access to a commercial space for a limited period of time.
It is also important for property owners to be aware of the implications of leaving a property empty for an extended period of time. In some cases, local authorities may charge an additional empty property premium on top of the standard business rates for properties that have been vacant for a certain period of time. This additional charge can further increase the financial burden on property owners and should be taken into consideration when evaluating the best course of action for empty commercial properties.
In addition, property owners should make sure to keep the VOA informed of any changes to the property that may affect its rateable value. This can include changes in the property’s use, renovations or improvements, or changes in the surrounding area that may impact the property’s rental value. By keeping the VOA informed, property owners can ensure that they are paying the correct amount of business rates on their empty commercial property.
Overall, it is important for property owners to understand the implications of business rates on empty commercial property and to explore all options available to mitigate the financial burden. By staying informed and proactive, property owners can maximize the value of their properties and ensure long-term profitability.