As a commercial property owner, one of the important factors to consider is the rates on empty commercial property. Empty commercial properties can be a significant drain on your income, but understanding how rates are calculated and what you can do to minimize them can help you maximize your investment.
rates on empty commercial property, also known as non-domestic rates or business rates, are a tax that is charged on most non-residential properties in the UK. These rates are set by the government and are used to fund local services such as schools, roads, and police services. The amount of rates you pay on your empty commercial property will depend on the rateable value of the property, as well as any reliefs or exemptions that may apply.
The rateable value of a property is determined by the Valuation Office Agency (VOA) and is based on the rental value of the property. If your property has a rateable value of less than £12,000, you may be eligible for small business rate relief, which could reduce the amount of rates you have to pay. Additionally, if your property is empty, you may be entitled to an empty property rate relief, which could provide you with a discount on the rates you owe.
However, it’s important to note that empty commercial properties are subject to higher rates than occupied properties. This is because the government wants to discourage property owners from leaving their properties empty, as this can have a negative impact on the local economy. As a result, many property owners find that rates on empty commercial property can eat into their profits and make it difficult to attract tenants.
So, what can you do to minimize the rates on your empty commercial property? One option is to consider leasing the property to a charity or community group. Properties that are occupied by registered charities or community amateur sports clubs are eligible for mandatory rate relief, which means that no rates are payable on the property. This can be a win-win situation for both parties, as the charity or community group benefits from reduced overheads, while you benefit from not having to pay rates on the property.
Another option is to consider appealing the rateable value of your property. If you believe that the rateable value assigned to your property is too high, you can submit an appeal to the VOA. If successful, the rateable value of your property will be reduced, which could result in lower rates. While the appeals process can be time-consuming and complex, it can be worth it in the long run if you are able to secure a reduced rateable value for your property.
If you are unable to secure rate relief or successfully appeal the rateable value of your property, you may want to consider other ways to generate income from your empty commercial property. One option is to rent out the property for temporary or short-term uses, such as pop-up shops, events, or storage. By making use of your property in this way, you can generate income to offset the rates you have to pay while also keeping the property occupied and well-maintained.
Overall, rates on empty commercial property can be a challenge for property owners, but with the right strategies in place, it is possible to minimize the impact of rates on your investment. By understanding how rates are calculated, exploring available reliefs and exemptions, and considering alternative uses for your property, you can maximize your investment and make the most of your empty commercial property.