When it comes to owning commercial property, understanding the various costs associated with it is crucial for maximizing profits. One such cost that often catches property owners off guard is the rates on empty commercial property. These rates can vary greatly depending on location and property type, so it’s important to have a good grasp of what to expect.
rates on empty commercial property, also known as business rates, are a tax that property owners are required to pay on non-residential properties in the UK. These rates are based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). The rateable value is an estimate of the open market rental value of the property at a specific point in time.
One of the main reasons why rates on empty commercial property can catch property owners off guard is that they still have to pay these rates even if their property is empty. This is different from residential properties, where owners can apply for a temporary exemption from council tax if the property is unoccupied. For commercial properties, however, there is no such exemption, and owners are still liable for business rates even if their property is vacant.
The rates on empty commercial property can vary greatly depending on a number of factors. Location plays a big role in determining the rateable value of a property, as properties in prime locations will typically have higher rateable values. The size and type of the property also play a part, with larger properties generally having higher rateable values. The condition of the property and any amenities or services it offers can also affect the rateable value.
In addition to location and size, the rateable value of a property is also affected by changes in the local property market. If property values in a particular area increase, the rateable value of properties in that area is likely to increase as well. This means that property owners could see their rates on empty commercial property rise even if nothing has changed about their property itself.
One way to potentially reduce the impact of rates on empty commercial property is to appeal the rateable value that has been assigned to the property. Property owners have the right to challenge the rateable value through a process known as a business rates appeal. This involves providing evidence to the VOA that the rateable value is incorrect, which could result in a lower rateable value and therefore lower rates on empty commercial property.
Another strategy for dealing with rates on empty commercial property is to explore ways to generate income from the property, even if it is vacant. This could involve renting out the space on a temporary basis for events or pop-up shops, or it could involve offering services such as storage or parking. By generating some income from the property, owners can offset the cost of the rates on empty commercial property.
It’s also worth noting that there are some circumstances in which property owners may be eligible for relief from rates on empty commercial property. For example, properties with a rateable value of less than £2,600 are eligible for small business rate relief, which could reduce the amount of rates that need to be paid. Properties that are being refurbished or are undergoing structural changes may also be eligible for relief from rates on empty commercial property.
In conclusion, rates on empty commercial property are an important cost that property owners need to be aware of. Understanding how these rates are calculated and what factors can affect them is key to maximizing profits and minimizing expenses. By knowing what to expect and exploring strategies for reducing the impact of rates on empty commercial property, property owners can better manage this cost and make their commercial property investment as profitable as possible.