When it comes to owning commercial property, there are various financial responsibilities that owners must adhere to. One of these responsibilities is paying rates on the property. Rates are a form of property tax that is used to fund local government services such as schools, libraries, and garbage collection. However, owners of empty commercial properties may be surprised to learn that they are still required to pay rates on these properties, even if they are not generating any income. In this article, we will delve into the concept of rates payable on empty commercial property and explore why they are still required.
rates payable on empty commercial property, often referred to as empty property rates, are a form of property tax that is charged on commercial properties that are unoccupied. These rates are in addition to the regular business rates that all commercial properties are required to pay. The rationale behind empty property rates is to incentivize property owners to keep their properties occupied and in use, rather than letting them sit empty for extended periods of time.
It is important to note that not all empty commercial properties are subject to empty property rates. Any commercial property that is exempt from business rates will also be exempt from empty property rates. This includes properties such as properties with a rateable value of under £2,900, certain agricultural properties, and properties that are temporarily exempt from business rates due to renovations or repairs.
The rates payable on empty commercial property are typically set at the same rate as the full business rates that would be payable if the property were occupied. However, some local authorities have the discretion to set a lower rate for empty property rates. This can vary depending on the area and the specific circumstances of the property.
For property owners, the prospect of paying rates on an empty commercial property can be daunting. After all, without any income coming in from tenants, paying additional taxes can place a significant financial burden on the owner. To address this issue, some property owners may consider various strategies to try and reduce their liability for empty property rates.
One common strategy that property owners may consider is leasing the property to a company that qualifies for small business rates relief. This can help to reduce the overall rates payable on the property, as small business rates relief can significantly reduce the amount of rates that a qualifying business is required to pay. However, it is important to note that this strategy may not be suitable for all properties or owners, as it requires finding a tenant who meets the specific criteria for small business rates relief.
Another strategy that property owners may consider is exploring the option of temporary exemptions or reliefs that may be available for certain types of commercial properties. For example, properties that are undergoing substantial renovation or repair works may be eligible for a temporary exemption from empty property rates. Owners should consult with their local authority to determine if their property qualifies for any exemptions or reliefs.
Overall, while the concept of rates payable on empty commercial property may seem unfair to some property owners, it is important to understand the rationale behind these rates. By incentivizing property owners to keep their properties occupied and in use, local authorities can help to prevent the blight of empty storefronts and vacant buildings in commercial areas. For property owners, it is essential to explore all available options for reducing their liability for empty property rates and to stay informed about any exemptions or reliefs that may be available to them. By taking proactive steps to address their rates liability, property owners can help to mitigate the financial impact of owning empty commercial property.