Understanding Empty Rates Commercial Property

empty rates commercial property, also known as business rates, can be a significant concern for property owners and landlords. These rates are charged on commercial properties that are empty for an extended period of time, and they can quickly add up to a substantial cost. Understanding how empty rates are calculated and what options are available for reducing or avoiding them is essential for anyone involved in commercial property ownership or management.

Empty rates on commercial property are calculated based on the rateable value of the property. This value is determined by the Valuation Office Agency (VOA) and is reassessed every five years. The rateable value is used to calculate the business rates that must be paid on the property each year. When a commercial property becomes empty, the owner or landlord is still required to pay these rates, although there are some exemptions and reliefs available.

One common exemption from empty rates is for properties with a rateable value of less than £2,600. These properties are considered to be small business properties and are eligible for small business rate relief, which means that they are exempt from empty rates. This exemption can provide significant savings for owners of smaller commercial properties.

Another exemption from empty rates is available for properties that are empty for a short period of time. In England and Wales, commercial properties are exempt from empty rates for the first three months that they are empty. After this initial period, the full rate must be paid unless the property qualifies for another exemption or relief.

In some cases, property owners may be able to apply for relief from empty rates if they can demonstrate that they are actively looking for a tenant or working to bring the property back into use. This relief is known as the “empty property rate relief” and can provide a temporary reprieve from the full empty rates bill. Property owners must apply for this relief and provide evidence of their efforts to let or sell the property in order to qualify.

For properties that are unlikely to be reoccupied in the near future, there are still options available to reduce the cost of empty rates. One approach is to explore the possibility of demolishing or redeveloping the property. By obtaining planning permission for a new development, property owners may be able to claim an exemption from empty rates for up to 18 months while the development is underway. This can provide a significant saving on empty rates and may also result in a more profitable use of the land in the long term.

Another option for reducing empty rates on commercial property is to consider leasing the property on a short-term basis to a charity or community group. Non-profit organizations are eligible for 80% relief on empty rates, which means that property owners can significantly reduce their empty rates bill by leasing the property to a qualifying organization. This approach can help to minimize the financial impact of empty rates while also benefiting the local community.

In some cases, property owners may be able to negotiate with the local council to reduce or waive empty rates in exchange for bringing the property back into use. By demonstrating a commitment to reoccupying the property and contributing to the local economy, owners may be able to secure a reduction in their empty rates bill. This approach requires proactive communication with the council and a clear plan for redeveloping or letting the property.

Overall, empty rates commercial property can be a significant financial burden for property owners and landlords. Understanding how these rates are calculated and what options are available for reducing or avoiding them is essential for minimizing costs and maximizing the value of commercial property investments. By exploring exemptions, reliefs, and other strategies for reducing empty rates, property owners can protect their assets and optimize their returns on commercial property.