When it comes to owning commercial property, there are various costs and expenses that property owners must consider. One significant cost that property owners need to be aware of is the rates payable on empty commercial property. These rates, also known as business rates, can often be a source of confusion and frustration for property owners. In this article, we will take a closer look at rates payable on empty commercial property and provide some insight into how they are calculated and what property owners can do to manage these costs effectively.
Business rates are a type of tax that commercial property owners are required to pay to the local council. These rates are based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). The rateable value is an estimate of the open market rental value of the property at a specific point in time. The local council uses this rateable value to calculate the amount of rates payable by the property owner.
One common misconception about business rates is that property owners do not have to pay them if their property is empty. While there are certain exemptions and reliefs available for empty properties, property owners are generally still required to pay a portion of the business rates on their empty commercial property. The amount of rates payable on an empty property will depend on various factors, such as the rateable value of the property and the council’s policies on empty property relief.
In some cases, property owners may be eligible for relief on the rates payable for their empty commercial property. For example, properties that are undergoing major structural repairs or undergoing a change in ownership may be eligible for relief. Additionally, properties with a rateable value below a certain threshold may be eligible for small business rate relief, which can significantly reduce the amount of rates payable. It is essential for property owners to be aware of the relief options available to them and to take advantage of any that may apply to their situation.
Property owners should also be aware of the consequences of not paying the rates on their empty commercial property. Failure to pay the rates can result in penalties and legal action by the local council. In severe cases, the council may even take possession of the property to recover the unpaid rates. Property owners should make it a priority to stay current on their rates payments to avoid any potential legal issues or financial penalties.
Managing rates payable on empty commercial property can be a challenging task for property owners, particularly if they own multiple properties or are unfamiliar with the business rates system. One strategy that property owners can use to manage their rates effectively is to work with a professional property management company. Property management companies have the expertise and resources to help property owners navigate the complexities of the rates system and ensure that they are paying the correct amount.
Another important consideration for property owners is to keep track of any changes in the rateable value of their property. The rateable value of a property can change over time due to factors such as renovations, changes in the local rental market, or changes in the property’s use. Property owners should regularly review the rateable value of their property and notify the local council of any changes that may affect their rates payable.
In conclusion, rates payable on empty commercial property are an important consideration for property owners to be aware of. Understanding how rates are calculated, knowing the relief options available, and staying current on rates payments are all essential steps for managing this aspect of property ownership effectively. By taking a proactive approach to managing rates payable, property owners can avoid financial penalties and legal issues and ensure that they are meeting their obligations to the local council.