When it comes to owning commercial property, there are many costs and fees that landlords are responsible for. One of these costs is the rates payable on empty commercial property. This expense can often come as a surprise to property owners, especially if they are not familiar with the rules and regulations surrounding it. In this article, we will explore what rates payable on empty commercial property are, how they are calculated, and what landlords can do to minimize this expense.
rates payable on empty commercial property refer to the taxes that property owners must pay to the local council if their commercial property is vacant. These rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA). The rateable value is used to assess how much a property should contribute towards local services, such as road maintenance, street cleaning, and waste disposal.
The rules surrounding rates payable on empty commercial property vary depending on the location of the property. In most cases, landlords are required to pay the full amount of rates if their property is empty for three months or more. However, some local councils offer temporary exemptions or discounts for newly vacant properties, which can provide some relief for property owners.
It is important for landlords to understand how rates payable on empty commercial property are calculated in order to budget for this expense effectively. The rateable value is multiplied by the business rates multiplier set by the government to determine the annual rates payable. This amount is then divided by 12 to calculate the monthly rates payable on the property.
For example, if a commercial property has a rateable value of £20,000 and the business rates multiplier is 50p, the annual rates payable would be £10,000 (£20,000 x 0.50). This amounts to £833.33 per month that the landlord would be responsible for paying if the property is vacant for three months or more.
Landlords can take proactive steps to minimize the rates payable on empty commercial property. One option is to consider applying for an empty property relief scheme, which provides a temporary exemption or discount on rates for vacant properties. This can help reduce the financial burden on landlords while they seek new tenants for their property.
Another strategy is to engage with the local council to negotiate a payment plan for rates payable on empty commercial property. Some councils may be willing to work with landlords to come up with a manageable payment schedule, especially if the property is experiencing prolonged vacancy due to unforeseen circumstances.
In some cases, landlords may also be eligible for small business rates relief, which provides a discount on business rates for properties with a rateable value below a certain threshold. This can help alleviate the financial pressure of paying rates on empty commercial property, especially for small business owners and individual landlords.
It is important for landlords to stay informed about the rules and regulations surrounding rates payable on empty commercial property to avoid any penalties or fines. Failure to pay the required rates can result in legal action being taken against the property owner, including court proceedings and potential seizure of assets.
In conclusion, rates payable on empty commercial property are an important expense that landlords must budget for when owning commercial property. By understanding how these rates are calculated, exploring potential exemptions and discounts, and engaging with the local council for payment options, landlords can effectively manage this expense and minimize the financial impact of vacant properties.