When it comes to owning commercial property, there are various factors that can impact how profitable or costly it can be for the owner One of the significant costs associated with owning commercial property is business rates Business rates are a tax on non-residential properties that are used to fund local government services These rates can have a significant impact on the bottom line for property owners, especially when the property is sitting empty and not generating any income.
In this article, we will dive deeper into the topic of business rates on empty commercial property and discuss how it can affect property owners financially.
Business rates are charged on most non-domestic properties, including shops, offices, warehouses, and factories The rates are calculated based on the rental value of the property, which is determined by the Valuation Office Agency (VOA) The local council is responsible for collecting business rates and using the revenue to fund local services such as schools, roads, and waste collection.
When a commercial property is empty, the owner is still liable to pay business rates This can be a significant financial burden, especially for small business owners or landlords who are struggling to find tenants for their property In some cases, business rates on an empty property can be as high as when the property is occupied, making it even more challenging for owners to cover the costs.
There are some exemptions and reliefs available to property owners who have empty commercial properties For example, if a property is undergoing major repairs or structural changes, the owner may be eligible for empty property relief This relief can significantly reduce the amount of business rates payable on the property during the renovation period.
However, empty property relief is not automatic, and property owners must apply for it through their local council This process can be time-consuming and complicated, and some property owners may not even be aware that they are eligible for relief business rates empty commercial property. As a result, many owners end up paying full business rates on their empty properties, putting them at a financial disadvantage.
In addition to empty property relief, there are also business rates exemptions available for certain types of properties For example, agricultural land and buildings, fish farms, and some listed buildings are exempt from business rates Property owners should check with their local council to see if their property qualifies for any exemptions or reliefs to reduce their business rates liability.
The issue of business rates on empty commercial property has become even more pressing in recent years due to the rise of online shopping and changing consumer behavior Many high street shops and retail units are sitting empty as more consumers choose to shop online rather than in physical stores This has resulted in a decrease in rental value for commercial properties, making it even harder for property owners to find tenants and generate income.
The government has recognized the challenges faced by property owners with empty commercial properties and has introduced some measures to help alleviate the financial burden For example, in response to the COVID-19 pandemic, the government introduced a temporary relief scheme for business rates for the retail, hospitality, and leisure sectors This scheme aimed to provide financial support to businesses that were forced to close due to lockdown restrictions.
However, it is essential for property owners to be proactive in seeking out information and assistance when it comes to business rates on empty commercial property By staying informed about the available reliefs and exemptions, property owners can better manage their financial obligations and mitigate the impact of business rates on their bottom line.
In conclusion, business rates on empty commercial property can be a significant financial burden for property owners It is crucial for owners to be aware of the available reliefs and exemptions and to proactively seek out assistance from their local council By taking the necessary steps to reduce their business rates liability, property owners can better manage their costs and navigate the challenges of owning empty commercial property in today’s ever-changing market.