Understanding Rates Payable On Empty Commercial Property

When it comes to owning commercial property, there are numerous expenses that can quickly add up. One such cost that property owners must be aware of is the rates payable on empty commercial property. These rates, also known as business rates, are a form of tax that is imposed on non-residential properties in the UK. In this article, we will delve into the specifics of rates payable on empty commercial property and explore how property owners can navigate this aspect of property ownership.

Business rates are a tax that is charged on most non-domestic properties, including commercial properties such as shops, offices, and warehouses. The amount of rates payable is determined by the rateable value of the property, which is assessed by the Valuation Office Agency (VOA). The rateable value is based on the estimated yearly rental value of the property, and it is used to calculate how much business rates the property owner must pay.

One of the key aspects of rates payable on empty commercial property is the Empty Property Rates (EPR). EPR is a specific type of business rates that property owners must pay if their commercial property is empty for an extended period of time. The rules around EPR can vary depending on the specific circumstances of the property, so it is important for property owners to understand their obligations in this regard.

Under current legislation in the UK, property owners are generally entitled to a three or six-month period of empty property relief, during which they do not have to pay business rates on their empty commercial property. After this initial period, however, property owners may be required to pay the full business rates on their empty property, unless they qualify for certain exemptions or relief schemes.

One common exemption from EPR is if the property is exempt from business rates altogether. This can occur if the property falls under certain categories, such as agricultural land or buildings, fish farms, or properties used for training or welfare purposes. In these cases, the property may be eligible for full relief from business rates, even if it is empty.

Another potential relief option for property owners is the Small Business Rate Relief scheme. This scheme provides relief for eligible small businesses that meet certain criteria, such as having a rateable value below a certain threshold. If a property owner qualifies for this relief, they may be entitled to a reduction in their business rates, even if the property is empty.

In some cases, property owners may also be able to apply for hardship relief if they are experiencing financial difficulty. Hardship relief is granted at the discretion of the local council and is intended to provide temporary relief to property owners who are struggling to pay their business rates. Property owners must demonstrate that they are facing genuine financial hardship in order to qualify for this relief.

It is important for property owners to be proactive in managing their rates payable on empty commercial property. Keeping detailed records of the property’s occupancy and communicating with the local council about any changes in the property’s status can help to ensure that property owners are aware of their obligations and potential relief options.

In addition to understanding and managing their rates payable, property owners should also consider other strategies for mitigating the costs of owning empty commercial property. This may include exploring options for temporary leasing or renting out the property on a short-term basis to generate income and reduce the financial burden of empty property rates.

Overall, rates payable on empty commercial property can be a significant expense for property owners, but with careful planning and awareness of available relief options, property owners can effectively manage this aspect of property ownership. By staying informed and proactive in their approach to rates payable, property owners can navigate the complexities of business rates and minimize the financial impact of owning empty commercial property.