As a property owner or investor, one of the most frustrating things to deal with is an empty commercial property Not only does it mean a loss of potential income, but it can also come with additional financial burdens such as empty rates In this article, we will delve into what exactly empty rates on commercial property are, how they are calculated, and some strategies to potentially reduce or avoid them altogether.
Empty rates, also known as vacant rates, are a form of business rates that are payable on commercial properties that have been empty for a certain period of time The purpose of empty rates is to encourage property owners to bring their vacant properties back into use or to sell them to someone who will utilize the space However, empty rates can be a significant financial burden, especially for property owners who are struggling to fill their commercial spaces.
The calculation of empty rates on commercial properties can vary depending on the location and size of the property In England, for example, an empty commercial property will not be subject to empty rates for the first three months it is empty After this initial three-month period, the property owner will be required to pay 100% of the business rates on the property In Scotland, however, the empty rates on commercial properties are applied differently, with the property owner being required to pay 50% of the business rates after the property has been empty for 3 months, and 90% after it has been empty for 6 months.
There are several strategies that property owners can employ to potentially reduce or avoid empty rates on their commercial properties One common tactic is to seek exemption from empty rates by proving that the property is undergoing repairs or structural changes that prevent it from being occupied empty rates commercial property. Property owners can also apply for discretionary relief from their local council if they can demonstrate that the property is being actively marketed for rent or sale.
Another strategy is to consider leasing the property on a short-term basis to a charity or community group In some cases, properties that are occupied by a charity or community group can be eligible for a 100% exemption from empty rates This can be a win-win situation for both parties, as the property owner avoids paying empty rates and the charity or community group gains access to a space they may not have been able to afford otherwise.
Property owners can also explore the option of temporarily repurposing their empty commercial properties For example, converting a vacant office space into a pop-up shop or temporary event space can not only generate income but also potentially exempt the property from empty rates This kind of creative thinking can help property owners turn a financial burden into a lucrative opportunity.
It is important for property owners to stay informed about changes in empty rates legislation and any potential relief measures that may be available to them Keeping in touch with local authorities and seeking advice from property experts can help property owners navigate the complexities of empty rates on commercial properties and potentially find ways to mitigate their impact.
In conclusion, empty rates on commercial properties can be a significant financial burden for property owners, especially those who are struggling to fill their vacant spaces Understanding how empty rates are calculated, exploring potential exemptions and relief measures, and thinking creatively about how to repurpose empty properties are all strategies that property owners can employ to reduce or avoid empty rates altogether By staying informed and proactive, property owners can take control of their empty commercial properties and turn them into profitable assets.