When it comes to owning commercial property, there are a variety of costs that come along with it. One of the costs that property owners must be aware of is the rates payable on empty commercial property. These rates can be a significant financial burden for property owners, especially if they are not aware of how they are calculated and when they must be paid.
In the United Kingdom, local authorities are responsible for setting the rates payable on commercial properties. These rates are known as business rates, and they are a tax that is based on the rateable value of a property. The rateable value is an estimate of the open market rental value of a property at a specific date, as determined by the Valuation Office Agency.
One of the key things to understand about rates payable on empty commercial property is that they still apply even if the property is unoccupied. This means that property owners must continue to pay business rates on any empty commercial properties that they own. However, there are some exceptions to this rule.
For example, if a property is empty for a short period of time due to refurbishment or repairs, the property owner may be eligible for a temporary exemption from paying business rates. This exemption typically lasts for three months, or six months for industrial properties. However, after the exemption period ends, the property owner will be required to resume paying business rates on the empty property.
Another important point to note is that the rates payable on empty commercial property are often higher than the rates payable on occupied properties. This is because local authorities want to discourage property owners from leaving their properties empty for extended periods of time. By charging higher rates on empty properties, they hope to incentivize property owners to either occupy or sell their properties.
It is also important for property owners to be aware of the consequences of not paying the rates payable on empty commercial property. Failure to pay these rates can result in legal action being taken against the property owner. This can lead to additional financial penalties, as well as potential court proceedings.
In some cases, property owners may be able to appeal the rates payable on their empty commercial properties. This can be done by challenging the rateable value of the property, or by providing evidence of the property’s condition or location that may warrant a reduction in rates. It is important for property owners to seek advice from a professional such as a surveyor or a solicitor before pursuing an appeal.
Property owners should also be aware of any changes to the rates payable on empty commercial property that may be introduced by the government or local authorities. For example, in recent years, there have been discussions about introducing a new tax on empty commercial properties in order to further incentivize property owners to keep their properties occupied.
In conclusion, rates payable on empty commercial property are an important consideration for property owners. It is essential for property owners to understand how these rates are calculated, when they must be paid, and what the consequences are for not paying them. By staying informed and seeking professional advice when necessary, property owners can navigate the complex world of business rates and ensure that they are fulfilling their financial obligations while also protecting their investments.