Empty rates on commercial properties can be a major headache for property owners, landlords, and tenants alike. Also known as vacant property rates, these charges are imposed by local authorities on commercial properties that have been unoccupied for a certain period of time. The purpose of these rates is to encourage property owners to bring their buildings back into use and prevent buildings from sitting empty for extended periods. In this article, we will delve into the world of empty rates commercial property, exploring what they are, how they are calculated, and what steps can be taken to minimize their impact.
Empty rates are based on the rateable value of the commercial property in question. The rateable value is an estimate of the annual rental value of the property and is set by the valuation office agency. The rateable value of a property is used to calculate the business rates that are payable on that property. When a commercial property becomes empty, it is still liable for business rates unless it falls within one of the exemptions or reliefs that are available.
The period of time for which a property must be empty before it becomes liable for empty rates varies depending on the specific circumstances. In general, a property becomes liable for empty rates after it has been empty for three months. However, there are exceptions to this rule, such as when a building is being renovated or reconstructed. In some cases, properties may be exempt from empty rates for longer periods if they fall within specified categories, such as listed buildings or certain industrial properties.
Once a property becomes liable for empty rates, the charges are calculated based on a percentage of the property’s rateable value. Currently, the standard rate for empty rates is set at 100% of the rateable value. This means that property owners will be required to pay the same amount in empty rates as they would in normal business rates if the property were occupied. However, there are certain reliefs and exemptions available that can help to reduce the amount of empty rates that are payable.
One common relief that is available to property owners is the small business rate relief. This relief is available to properties with a rateable value below a certain threshold and can significantly reduce the amount of empty rates that are payable. In some cases, properties may be eligible for an exemption from empty rates if they fall within specific categories, such as agricultural land or buildings that are undergoing major renovation works.
In addition to reliefs and exemptions, there are a number of other strategies that property owners can employ to minimize the impact of empty rates on their commercial properties. One such strategy is to actively market the property for rent or sale in order to bring in a tenant as quickly as possible. By keeping the property occupied, property owners can avoid empty rates altogether and generate rental income in the process.
Another option for property owners is to explore the possibility of using the property for alternative purposes while it is empty. For example, a vacant retail unit could be temporarily used as a pop-up shop or exhibition space, generating income and keeping the property active. By thinking creatively about how to use empty properties, owners can not only reduce their empty rates liability but also potentially generate additional revenue in the process.
In conclusion, empty rates on commercial properties can be a significant cost for property owners, landlords, and tenants. By understanding how empty rates are calculated, what reliefs and exemptions are available, and what strategies can be used to minimize their impact, property owners can navigate this complex area of property law more effectively. Whether it’s actively marketing the property for rent, exploring alternative uses for the property, or taking advantage of available reliefs, there are steps that can be taken to mitigate the impact of empty rates on commercial properties.