Business rates on empty commercial property, also known as vacant property rates, can be a significant financial burden for property owners These rates are calculated by the local council and are payable on commercial properties that are unoccupied for an extended period of time Understanding how these rates are calculated and how they can be reduced or mitigated is essential for property owners to minimize their financial liabilities.
When a commercial property becomes vacant, property owners are still liable to pay business rates unless certain exemptions or reliefs apply The local council determines the rateable value of the property, which is based on its market rental value This rateable value is then multiplied by the national non-domestic multiplier, set by the government, to calculate the total business rates payable for the property.
The national non-domestic multiplier is a fixed rate set annually by the government and is applied to the rateable value of commercial properties to determine the business rates payable The multiplier is the same for all properties in England, but it may vary slightly in other parts of the UK For the current financial year, the standard multiplier in England is 50.4p, which means that for a property with a rateable value of £10,000, the annual business rates payable would be £5,040.
Property owners are required to pay business rates on empty commercial property unless certain exemptions apply For example, newly built commercial properties are exempt from paying business rates for the first three months after completion After this initial grace period, the property becomes liable for business rates unless it qualifies for one of the available reliefs or exemptions.
One common relief that property owners can apply for is the empty property relief, which provides a 100% discount on business rates for properties that have been empty for a specified period business rates empty commercial property. In England, properties with a rateable value of less than £2,900 are eligible for a 100% empty property relief for an indefinite period Properties with a rateable value between £2,900 and £12,000 are eligible for a 100% discount for the first three months of vacancy, followed by a 50% discount for the remainder of the vacancy period.
Property owners can also apply for other reliefs and exemptions to reduce their business rates liabilities on empty commercial property For example, properties undergoing major structural repairs or undergoing redevelopment may qualify for a temporary exemption from business rates Additionally, properties owned by charities or community amateur sports clubs may be eligible for charitable rate relief, which can reduce the business rates payable by up to 80%.
It is important for property owners to be aware of the exemptions and reliefs available to them to minimize their financial liabilities on vacant commercial properties By taking advantage of these provisions, property owners can significantly reduce the impact of business rates on their bottom line and make their properties more attractive to potential tenants.
In some cases, property owners may choose to appeal the rateable value of their property if they believe it has been assessed incorrectly by the local council This process, known as a business rates appeal, can help property owners to lower their business rates liabilities and ensure that they are paying a fair amount based on the property’s actual market rental value.
Overall, business rates on empty commercial property can pose a significant financial burden for property owners, but there are ways to reduce or mitigate these liabilities By understanding how business rates are calculated, knowing the exemptions and reliefs available, and potentially appealing the rateable value of their property, property owners can take steps to minimize the impact of business rates on their vacant commercial properties.