Owning commercial property can be a lucrative investment, providing a steady stream of rental income However, when commercial properties sit empty, owners may find themselves facing a hefty financial burden in the form of business rates These rates are a tax on non-domestic properties that business owners must pay to their local council In this article, we will explore the intricacies of business rates on empty commercial property and provide guidance on how to navigate this complex landscape.
Business rates are calculated based on the rateable value of a property, which is set by the Valuation Office Agency (VOA) This value represents the rental value of the property on a particular date and is used to determine how much the property owner must pay in business rates In England, the rateable value is reassessed every five years, while in Scotland and Wales, it is reassessed every three years.
When a commercial property becomes empty, business rates are still payable, albeit at a reduced rate In England and Wales, owners of empty commercial properties are entitled to a 100% exemption from business rates for the first three months the property is empty After this period, owners must pay the full rate unless the property qualifies for an extended empty property relief This relief provides an additional 100% exemption for properties with a rateable value of less than £2,900, and a 50% discount for properties with a rateable value between £2,900 and £12,000.
In Scotland, owners of empty commercial properties are entitled to a 100% exemption from business rates for the first three months the property is empty After this period, owners must pay 90% of the standard rate unless the property qualifies for an extended empty property relief business rates empty commercial property. This relief provides a 10% discount for properties with a rateable value between £1,000 and £18,000.
Navigating the world of business rates on empty commercial property can be challenging, especially for property owners with multiple properties or properties in different regions To ensure compliance with the law and minimize the financial burden of business rates, property owners may benefit from seeking the advice of a chartered surveyor or a professional tax advisor These professionals can help property owners understand their obligations, apply for any available reliefs or exemptions, and navigate the appeals process if necessary.
It is essential for property owners to stay informed about changes in business rates legislation and any new reliefs or exemptions that may be available to them For example, in response to the COVID-19 pandemic, the UK government introduced a temporary relief for retail, hospitality, and leisure properties that have been forced to close due to lockdown restrictions This relief provides a 100% exemption from business rates for the 2020-2021 tax year.
Owners of empty commercial properties should also consider alternative uses for their properties to minimize the financial impact of business rates For example, renting out the property on a short-term basis for pop-up shops, events, or filming locations can generate income and help to offset the cost of business rates Property owners should also be aware of any renovation or refurbishment projects that may qualify for temporary relief from business rates.
In conclusion, business rates on empty commercial property can be a significant financial burden for property owners However, by understanding their obligations, seeking professional advice, and staying informed about changes in legislation, property owners can navigate this complex landscape and minimize the financial impact of business rates By exploring alternative uses for their properties and taking advantage of available reliefs and exemptions, property owners can turn empty commercial properties into profitable investments.