empty rates commercial property, also known as business rates, can be a significant financial burden for property owners and businesses alike. Business rates are charged on most non-domestic properties, including shops, offices, warehouses, and factories. When a commercial property becomes vacant, the owner is still required to pay business rates unless they qualify for an exemption. This can result in hefty bills stacking up for properties that are not generating any income.
The empty rates commercial property scheme was introduced by the government to discourage property owners from leaving their buildings vacant for extended periods of time. However, this policy can often be a source of frustration for owners who are struggling to find tenants or are in the process of refurbishing their property.
So, what can property owners do to minimize the impact of empty rates on their finances? Here are some strategies to consider:
1. Temporary occupation
One way to avoid paying empty rates commercial property is to find a temporary occupier for the building. This could be a company looking for short-term office space or a pop-up retail store. By allowing a temporary occupier to move in, you can qualify for business rates relief under certain circumstances.
2. Negotiate with the local council
It is possible to negotiate with the local council to reduce or exempt the empty rates on your commercial property. This could involve providing evidence of your efforts to market the property for rent or sale, or demonstrating that the property is undergoing renovation work. Councils have the discretion to offer relief on a case-by-case basis, so it is worth exploring this option.
3. Use the property for storage
If your commercial property is suitable for storage purposes, you may be able to avoid paying empty rates by using the building for this purpose. This could involve renting out space to businesses looking for storage solutions or using the space for your own storage needs. Be sure to check with your local council to see if this arrangement qualifies for rates relief.
4. Appeal the rateable value
If you believe that the rateable value of your property is incorrect, you have the right to appeal to the Valuation Office Agency (VOA). By submitting evidence to support your claim, you may be able to lower the rateable value and subsequently reduce the amount of empty rates you are required to pay. It is important to seek professional advice before starting the appeal process to ensure the best possible outcome.
5. Utilize exemptions and reliefs
There are several exemptions and reliefs available for empty rates commercial property. For example, properties with a rateable value of less than £2,900 are exempt from business rates for three months. Additionally, newly built properties are exempt from empty rates for the first three months after completion. By understanding the available exemptions and reliefs, property owners can minimize the financial impact of empty rates.
6. Consider leasing or selling the property
If vacancies are an ongoing issue, it may be worth considering leasing or selling the property to avoid empty rates commercial property altogether. While this may not be the ideal solution for all property owners, it can provide relief from the financial burden of empty rates. By working with a commercial real estate agent, you can explore options for finding a new tenant or buyer for the property.
In conclusion, empty rates commercial property can be a significant cost for property owners, but there are ways to minimize the impact. By exploring strategies such as temporary occupation, negotiation with the local council, utilizing the property for storage, appealing the rateable value, and taking advantage of exemptions and reliefs, property owners can effectively manage the financial burden of empty rates. Whether you are looking to avoid empty rates altogether or reduce the amount you pay, it is important to explore all options and seek professional advice when necessary. By taking proactive steps, property owners can navigate the challenges of empty rates commercial property and protect their bottom line.