Understanding Rates Payable On Empty Commercial Property

When owning a commercial property, there are numerous costs and responsibilities to consider. One of these expenses includes rates payable on empty commercial property. This can be a significant financial burden for property owners, especially when the property remains vacant for an extended period of time. In this article, we will delve into the details of rates payable on empty commercial property and discuss ways to manage this cost effectively.

rates payable on empty commercial property, also known as empty property rates or business rates, are taxes that property owners must pay to local authorities when their commercial property is unoccupied. These rates are charged to encourage property owners to bring their vacant properties back into use or to sell them to someone who will utilize them. The rationale behind this is to prevent properties from sitting empty and therefore contributing to urban blight.

The rates payable on empty commercial property are calculated based on the rateable value of the property. The rateable value is assessed by the Valuation Office Agency (VOA) and reflects the market rental value of the property as of a specific date. The local authority then applies a multiplier, also known as the Uniform Business Rate (UBR), to the rateable value to determine the rates payable. The UBR is set annually by the government and varies depending on the location of the property.

In general, properties that are empty for less than three months are not subject to empty property rates. However, once a property has been vacant for three months or longer, the owner becomes liable to pay these rates. The exact amount payable varies depending on the rateable value and the current UBR in effect. It is important for property owners to be aware of these costs and budget accordingly to avoid any financial strain.

There are several ways in which property owners can manage the rates payable on empty commercial property effectively. One option is to seek temporary tenants or short-term leases for the property. By doing so, the property can be occupied, and the owner can avoid paying empty property rates. This can also generate some income while the property is vacant, helping to offset some of the costs associated with owning the property.

Another strategy is to actively market the property for sale or lease. By finding a new occupant for the property, the owner can eliminate the need to pay empty property rates altogether. Additionally, selling or leasing the property can provide a source of income and relieve the owner of the burden of owning an empty property.

Property owners can also explore the option of appealing the rateable value of the property with the VOA. If the rateable value is deemed to be inaccurate or unfair, the owner may be able to reduce the amount of rates payable on the property. However, it is important to note that this process can be complex and time-consuming, so property owners should seek professional advice before pursuing an appeal.

In some cases, property owners may qualify for exemptions or discounts on empty property rates. For example, properties that are undergoing major renovations or structural repairs may be eligible for a temporary exemption from these rates. Similarly, properties that are listed buildings or have historical significance may be eligible for a discount on empty property rates. Property owners should research the specific criteria for these exemptions and discounts to determine if they qualify.

Overall, rates payable on empty commercial property can be a significant cost for property owners. However, by actively managing the property and exploring various strategies to reduce or eliminate these rates, owners can effectively minimize this financial burden. Whether through temporary occupancy, marketing the property for sale or lease, appealing the rateable value, or qualifying for exemptions or discounts, there are several ways to address the issue of empty property rates and ensure that owning a commercial property remains a financially viable endeavor.