When it comes to owning commercial property, one of the costs that owners need to consider is the rates payable on the property. Rates are a tax levied by the local government to help fund local services and infrastructure. For owners of empty commercial property, understanding how rates are calculated and what exemptions may apply is crucial to effectively managing costs. In this article, we will delve into the details of rates payable on empty commercial property.
Rates payable on commercial property are based on the rateable value of the property. The rateable value is an estimate of the property’s rental value as of a specific date, set by the local government’s Valuation Office Agency (VOA). The rates are then calculated by multiplying the rateable value by the business rates multiplier, which is set annually by the government.
For owners of empty commercial property, the rates payable can be a significant financial burden. In most cases, owners are still required to pay rates on empty property, even if the property is not generating any income. However, there are some exemptions and reliefs that owners may be eligible for.
One common exemption is the small business rates relief. This relief is available to businesses that occupy only one property with a rateable value below a certain threshold. If the property meets the criteria for small business rates relief, the owner may be eligible for a reduction in their rates bill.
Another exemption that may apply to empty commercial property is the empty property relief. This relief allows owners of certain types of empty property to receive a discount on their rates bill. The length of time for which the relief applies varies by location, so owners should check with their local council to determine if they qualify.
It’s important to note that not all empty commercial properties are eligible for empty property relief. Some properties, such as those that are under renovation or being marketed for sale or rent, may still be subject to the full rates bill. Owners should consult with their local council to determine the specific rules and regulations that apply to their property.
In some cases, owners may be able to negotiate a temporary reduction in rates with their local council. This can be particularly helpful for owners who are struggling to find tenants for their property or are experiencing financial difficulties. Owners should be prepared to provide evidence of their situation and may need to work closely with their council to come to a mutually agreeable solution.
For owners who are considering purchasing empty commercial property, it’s essential to factor in rates payable when assessing the financial viability of the investment. Owners should carefully review the rateable value of the property and consider any potential exemptions or reliefs that may apply. Working with a professional advisor can help owners navigate the complexities of rates payable and make informed decisions about their property investments.
In conclusion, rates payable on empty commercial property can be a significant cost for owners to bear. Understanding how rates are calculated and what exemptions may apply is essential for effectively managing these costs. By exploring the available relief options, negotiating with local councils, and seeking professional advice, owners can take steps to mitigate the financial impact of rates payable on their empty commercial property.