How Business Rates For Empty Commercial Property Can Affect Your Bottom Line

When it comes to owning or managing a commercial property, there are a lot of expenses to consider From maintenance costs to insurance premiums, owning a piece of commercial real estate can be a significant financial commitment One cost that often catches property owners off guard is business rates on empty commercial property In this article, we will discuss what business rates are, how they are calculated, and how they can impact your bottom line.

Business rates are a tax imposed by local authorities on non-domestic properties They are used to fund local services and infrastructure, much like council tax for residential properties However, one key difference when it comes to business rates is how they are applied to empty commercial properties.

Under current legislation, owners of empty commercial properties are still required to pay business rates This can come as a shock to property owners who may have assumed that they would not be liable for rates on a vacant property The rationale behind this policy is to discourage property owners from leaving properties empty for extended periods of time, as empty properties can have a negative impact on the local community and economy.

The amount of business rates payable on an empty commercial property is calculated based on the rateable value of the property The rateable value is determined by the Valuation Office Agency (VOA) and is based on the rental value of the property The rateable value is then multiplied by the appropriate multiplier set by the government to calculate the annual business rates bill.

In England, empty commercial properties are subject to different rates depending on how long they have been vacant Properties that have been empty for less than three months are exempt from business rates business rates empty commercial property. After three months, owners must pay 100% of the business rates bill After six months, the rates bill increases to 200% of the normal rate.

For property owners, the impact of business rates on empty commercial properties can be significant For those who are struggling to find tenants or who are in the process of refurbishing a property, paying additional rates on top of other expenses can be a strain on finances In some cases, property owners may decide to cut their losses and sell the property rather than continue to incur business rates on an empty building.

There are, however, some exemptions and reliefs available for certain types of properties For example, newly built properties are exempt from business rates for the first three months after completion Charities and community amateur sports clubs are entitled to an 80% discount on business rates if they occupy a property that would otherwise be empty Additionally, small business rates relief may be available for properties with a rateable value below a certain threshold.

Property owners who are struggling to pay business rates on empty commercial properties may also be able to negotiate with their local council for a reduction in rates Councils have the authority to grant discretionary relief in certain circumstances, such as when a property is undergoing renovation or when the local market is experiencing economic downturn.

In conclusion, the issue of business rates on empty commercial properties is one that can have a significant impact on property owners’ finances Understanding how rates are calculated and what exemptions and reliefs are available is crucial for managing this cost effectively For property owners who find themselves struggling to pay business rates on empty properties, it is important to explore all available options for relief and to communicate with local authorities to seek assistance.