Understanding Rates Payable On Empty Commercial Property

When it comes to owning commercial property, one of the key considerations for property owners is the payment of rates. Rates are charged by local authorities and are used to fund essential services such as road maintenance, rubbish collection, and public parks. However, what many property owners may not be aware of is that rates are still payable even on empty commercial properties. In this article, we will explore the rules and regulations regarding rates payable on empty commercial property.

Whether a property is in use or lying vacant, local authorities still charge rates on commercial properties. This is because the rates are based on the value of the property rather than the occupancy status. However, there are some exceptions and reliefs available for property owners who find themselves in this situation.

One important thing to note is that rates are not the same as rent. Rent is paid by the tenant for the use of the property, while rates are paid by the property owner to the local authority. Rates are based on the rateable value of the property, which is determined by the local Valuation Office Agency (VOA) in England, the Scottish Assessors in Scotland, and the Valuation Office in Wales.

The rateable value is an estimate of the open market rental value of the property as at a set date. This value is then used to calculate the business rates payable on the property. It is important to note that rates are payable on all commercial properties, whether they are occupied or vacant.

Property owners may wonder why they have to pay rates on empty commercial properties. The reason behind this is to discourage property owners from leaving properties vacant for long periods of time. By charging rates on empty properties, local authorities hope to incentivize property owners to either occupy or sell their properties.

However, there are some reliefs and exemptions available for property owners with empty commercial properties. In England, for example, property owners may be eligible for either a three or six-month exemption period, depending on the property type. After the exemption period ends, the property owner will be required to pay the full rates on the property.

In Scotland, property owners may be eligible for a 10% discount on their rates bill if the property has been unoccupied for 42 days or more. In Wales, property owners may be eligible for a 100% exemption from rates for up to three months if the property has been unoccupied. It is important for property owners to check with their local authority to see what reliefs and exemptions may be available to them.

It is also worth noting that property owners may be eligible for relief if their property is undergoing major renovation works. In England, for example, property owners may be eligible for a 100% exemption from rates for up to 12 months if the property is being renovated. In Scotland and Wales, similar relief schemes may be available, so it is important for property owners to inquire with their local authority.

Property owners may also be eligible for relief if they are experiencing financial hardship and are unable to pay the rates on their empty commercial property. In England, property owners may be eligible for hardship relief, which allows the local authority to reduce the rates payable on the property. In Scotland and Wales, similar relief schemes may be available, so it is important for property owners to seek advice from their local authority.

In conclusion, rates are payable on empty commercial properties, but there are reliefs and exemptions available for property owners. It is important for property owners to be aware of these rules and regulations and to seek advice from their local authority if they are struggling to pay the rates on their empty commercial property. By understanding the rules regarding rates payable on empty commercial property, property owners can better manage their finances and ensure compliance with local authority regulations.