Empty commercial property can be a burden for property owners and investors. Not only are they not generating income, but they also come with additional costs such as maintenance and security. One of the significant expenses that owners of empty commercial properties have to deal with is business rates. These rates can often feel like a double blow, adding to the financial strain of holding onto an empty property. Understanding how rates on empty commercial property work and exploring ways to mitigate these costs can help property owners navigate this challenging situation more effectively.
Business rates are taxes that are levied on non-domestic properties in the UK. The rates are calculated based on the rateable value of the property and are set by the government. The rateable value is an estimate of the property’s open market rental value as of a specific date. Property owners are required to pay these rates to the local council where the property is located.
One of the challenges that property owners face is that business rates are still applicable on empty commercial properties. In the past, property owners were granted relief from paying rates on empty properties for a certain period. However, the rules have changed, and now property owners are required to pay rates regardless of occupancy. This change has put a strain on property owners, especially during times of economic uncertainty when vacancies are more common.
The rates on empty commercial property can be a significant expense for property owners. However, there are ways to mitigate these costs. One option is to apply for business rates relief. There are various relief schemes available, such as Small Business Rate Relief and Enterprise Zones Relief, which can help reduce the amount of rates that property owners have to pay. Property owners should explore these options and see if they qualify for relief based on their circumstances.
Another option for mitigating rates on empty commercial property is to consider leasing the property on a short-term basis. By finding temporary tenants or pop-up shops, property owners can generate some income from the property and potentially reduce the rates they have to pay. While this may not be a long-term solution, it can help ease the financial burden of holding onto an empty property.
Property owners should also consider other factors that may affect the rateable value of their property. Making improvements to the property or changing its use can impact the rateable value and, in turn, the rates that need to be paid. Property owners should consult with a surveyor or a professional advisor to explore these options and see if there are any opportunities to reduce their rates liability.
Additionally, property owners should stay informed about any changes in rates legislation. The government sometimes introduces new schemes or incentives that can help property owners reduce their rates liability. By staying up-to-date with these developments, property owners can take advantage of any opportunities to lower their costs.
Overall, rates on empty commercial property can be a significant financial burden for property owners. However, by understanding how rates are calculated, exploring relief schemes, finding temporary tenants, and considering other factors that may impact rates liability, property owners can navigate this challenging situation more effectively. It is essential for property owners to stay informed and seek professional advice to explore all available options for mitigating these costs. With the right strategies in place, property owners can better manage the financial impact of holding onto an empty commercial property.