When it comes to owning commercial property, there are many factors that can impact the bottom line. One of these factors is the rates payable on the property, which can vary depending on whether the property is occupied or empty. In this article, we will delve into the intricacies of rates payable on empty commercial property.
rates payable on empty commercial property, also known as empty property rates, are a significant expense that property owners must consider. These rates are charged by local authorities in the UK and are based on the rateable value of the property. The rateable value is determined by the Valuation Office Agency (VOA) and is used to calculate the amount of rates payable by the property owner.
So, why are rates payable on empty commercial property necessary? The idea behind these rates is to prevent property owners from leaving their properties vacant for extended periods of time. By imposing rates on empty properties, local authorities hope to incentivize owners to either rent out their properties or put them to productive use, thus stimulating economic growth and preventing urban blight.
The rates payable on empty commercial property can be a substantial financial burden for owners, especially if they are already struggling to find tenants for their properties. That is why it is essential for property owners to understand how these rates are calculated and what exemptions or reliefs may be available to them.
In the UK, empty commercial properties are subject to rates payable after a certain period of time. Previously, properties were given a 100% exemption from rates payable for the first three months that they were empty. However, the law changed in 2008, and now properties are only given a 100% exemption for the first three months if they are industrial properties. For other types of commercial properties, the owners must pay the full rates from day one of the property being empty.
After the initial three-month period, different rates may apply depending on the specific circumstances of the property. For example, if the property has been empty for more than three months but less than six months, the owner may be eligible for a 50% discount on the rates payable. If the property remains empty for more than six months, the owner will be required to pay the full rates payable.
There are some exemptions and reliefs available for certain types of empty properties. For example, properties with a rateable value of less than £2,600 are not required to pay any rates on their empty properties. Additionally, charities and community amateur sports clubs are entitled to an 80% relief on the rates payable for their empty properties.
It is essential for property owners to be aware of these exemptions and reliefs so that they can take advantage of them and reduce their financial burden. Failure to pay the rates payable on empty commercial property can result in legal action by the local authorities, including the seizure of assets or court proceedings.
In some cases, property owners may choose to deliberately keep their properties empty to avoid paying rates. However, this tactic can backfire, as local authorities have the power to charge rates on properties they believe are being deliberately kept empty to avoid payment. It is crucial for property owners to be transparent about the status of their properties and work with the local authorities to find a mutually beneficial solution.
In conclusion, rates payable on empty commercial property are a necessary expense that property owners must contend with. By understanding how these rates are calculated, what exemptions and reliefs are available, and the consequences of non-payment, property owners can better navigate this aspect of property ownership. It is essential to work closely with local authorities and seek professional advice if needed to ensure compliance with the law and mitigate financial risks.