Most commercial property owners are well aware of the expenses that come with owning a property, one of which is paying business rates. Business rates are a tax on commercial properties that are used to fund local services. However, what some property owners may not realize is that even if their property is empty, they may still be required to pay business rates. In this article, we will delve into the rates payable on empty commercial property and what property owners need to know to avoid any surprises.
First and foremost, it is important to understand why business rates are still payable on empty commercial properties. The underlying reason is that business rates are not solely based on the use of the property, but rather on the fact that the property exists. This means that even if a commercial property is vacant and not generating any income, it still contributes to the local area and benefits from local services, such as roads, libraries, and waste collection. As such, business rates are still applicable to empty properties to ensure that property owners continue to contribute to these services.
The rates payable on empty commercial property can be a significant financial burden for property owners, especially during times when properties are vacant for extended periods. However, there are certain exemptions and reliefs that property owners may be eligible for to reduce the amount they need to pay. One such relief is the empty property rate relief, which provides a 100% reduction in business rates for certain types of empty commercial properties for a specified period.
To qualify for empty property rate relief, the property must be completely empty and not used for any business purposes. The relief typically lasts for three months for industrial properties and six months for all other types of commercial properties. After the initial period of relief expires, the property owner may still be eligible for a 50% reduction in business rates for the remaining period that the property remains vacant. It is important for property owners to apply for empty property rate relief as soon as the property becomes vacant to take advantage of any potential savings.
Another type of relief that may be available to property owners is the hardship relief, which is granted in cases where paying business rates on an empty property would cause financial hardship to the property owner. To qualify for hardship relief, property owners must provide evidence of their financial situation and demonstrate that paying business rates would pose a severe financial burden. The local authority has the discretion to grant hardship relief on a case-by-case basis, so property owners should be prepared to provide all relevant information to support their application.
In addition to exemptions and reliefs, property owners should also be aware of the consequences of not paying business rates on empty commercial properties. Failure to pay business rates can result in penalties and legal action by the local authority, which can further exacerbate the financial strain on property owners. It is crucial for property owners to stay informed about their obligations regarding business rates and take proactive steps to address any issues that may arise.
In conclusion, rates payable on empty commercial property can be a complex and challenging aspect of property ownership. Property owners must be aware of their obligations regarding business rates and take advantage of any available exemptions and reliefs to mitigate the financial impact of paying rates on vacant properties. By understanding the reasons behind the rates payable on empty commercial property and exploring potential avenues for relief, property owners can better navigate this aspect of property ownership and avoid any surprises along the way.