Understanding Rates Payable On Empty Commercial Property

When a commercial property is left vacant, it can be a costly expense for property owners. Not only are they missing out on potential rental income, but they are also required to pay business rates on the property. Business rates are a tax on non-domestic properties that are used to fund local services such as the police, fire brigade, and waste collection.

Empty commercial properties are not exempt from business rates, and in fact, property owners may still be required to pay a significant amount even if the property is unoccupied. This is an important consideration for property owners to keep in mind when deciding whether to rent out a property or leave it vacant.

The rates payable on empty commercial property are determined by the rateable value of the property. The rateable value is calculated by the Valuation Office Agency (VOA) and represents the rental value of the property as of a specific valuation date. The rateable value is used as a basis for calculating the business rates payable on a property.

The business rates payable on empty commercial property are usually set at a rate of 50% of the normal rate for the first three months that the property is vacant. After the initial three-month period, the property owner may be required to pay the full rate on the property.

There are some exceptions to this rule, however. In certain circumstances, property owners may be eligible for relief on the rates payable on empty commercial property. For example, if the property is undergoing major repairs or structural changes, the property owner may be able to apply for relief on the business rates payable during this period.

Additionally, property owners may be eligible for relief if the property is too dangerous to occupy, or if it is part of a redevelopment scheme that has been approved by the local council. In these cases, property owners may be able to apply for relief on the business rates payable on the property.

It’s important for property owners to be aware of the rates payable on empty commercial property and to plan accordingly. Leaving a property vacant can be a significant expense, especially if the property is subject to the full rate of business rates after the initial three-month period.

Property owners should carefully consider their options when deciding whether to rent out a property or leave it vacant. Renting out a property can provide a steady stream of income and help offset the costs of business rates, while leaving a property vacant can result in a loss of income and increased expenses.

In some cases, property owners may also be able to reduce the rates payable on empty commercial property by appealing the rateable value of the property. The rateable value is based on the rental value of the property, so if the property owner can demonstrate that the property is not worth as much as the VOA has assessed, they may be able to lower the business rates payable on the property.

In conclusion, the rates payable on empty commercial property can be a significant expense for property owners. It’s important for property owners to be aware of the rules and regulations governing business rates on vacant properties, as well as any potential relief options that may be available.

By understanding the rates payable on empty commercial property and planning accordingly, property owners can make informed decisions about whether to rent out a property or leave it vacant. This can help them to minimize expenses and maximize the potential for income from their commercial properties.