Empty commercial properties can be a significant drain on resources for property owners. Not only are they not generating any income, but they are also subject to business rates, which can add to the financial burden. In this article, we will explore the impact of rates on empty commercial property and discuss some potential solutions for property owners facing this challenge.
Business rates are a tax that is levied on most non-domestic properties in the UK. They are calculated based on the rateable value of the property, which is an estimate of its open market rental value as of a specific date. The rates are set by the government and are collected by local authorities to help fund the provision of local services.
One of the key issues facing property owners with empty commercial properties is that they are still required to pay business rates on these properties, even if they are not generating any income. This can be a significant financial burden, especially for property owners who are struggling to find tenants for their properties. In some cases, the rates on an empty property can be higher than the rates on a property that is occupied and generating income, which can make it even more challenging for property owners to keep their properties afloat.
There are some exemptions and reliefs available to property owners who have empty commercial properties, which can help to reduce the financial impact of business rates. For example, properties that are empty for a short period of time may qualify for a three-month exemption from business rates. Additionally, properties that are in need of repairs or undergoing structural changes may be eligible for partial relief from rates. However, these exemptions and reliefs are only temporary solutions, and property owners will still be required to pay rates on their empty properties in the long term.
One potential solution for property owners facing high rates on empty commercial properties is to consider leasing the property on a short-term basis. By leasing the property to a temporary tenant, property owners can generate some income from the property and reduce the financial burden of paying rates on an empty property. Short-term leases can also help to keep the property in good condition and make it more attractive to potential long-term tenants.
Another option for property owners is to consider converting the property to a different use that may be exempt from business rates. For example, properties that are used for charitable purposes or are considered to be industrial or agricultural may be eligible for relief from business rates. By exploring alternative uses for their properties, property owners may be able to reduce or eliminate the rates on their empty properties and generate income in the process.
Property owners can also explore the possibility of negotiating with their local authority for a reduction in rates on their empty commercial properties. Local authorities have the discretion to grant discretionary relief in certain circumstances, such as where a property owner is facing financial hardship or where there are exceptional circumstances that justify a reduction in rates. By presenting a compelling case to their local authority, property owners may be able to secure a reduction in rates on their empty properties and alleviate some of the financial burden.
In conclusion, rates on empty commercial properties can be a significant financial burden for property owners. However, there are options available to property owners to help reduce the impact of business rates on their empty properties. By exploring exemptions and reliefs, leasing the property on a short-term basis, considering alternative uses for the property, and negotiating with the local authority, property owners can take steps to alleviate the financial strain of rates on empty commercial properties.