Empty commercial properties can be a source of financial burden for property owners, especially when factoring in business rates Business rates are a tax that is charged on most non-domestic properties, including commercial and industrial properties The amount of business rates charged on a property is based on its rateable value, which is determined by the Valuation Office Agency (VOA)
The rates charged on empty commercial properties can vary depending on the location and size of the property In England, the rateable value of a property is reassessed every five years, with the most recent revaluation taking place in April 2017 This means that the amount of business rates charged on an empty commercial property can fluctuate over time, potentially adding to the financial strain on property owners.
When a commercial property becomes vacant, the owner is still required to pay business rates on the property This is because the property is still considered to be in use for business purposes, regardless of whether it is generating any income The government’s reasoning behind this policy is to discourage property owners from leaving properties vacant for long periods of time, thus encouraging them to bring the property back into use.
However, this policy has faced criticism from property owners who argue that they are being unfairly penalized for circumstances beyond their control For example, property owners may struggle to find tenants for their properties due to economic downturns, changes in market demand, or other external factors In these cases, the burden of paying business rates on an empty property can add to the financial strain on property owners.
In response to these concerns, the government introduced a temporary relief scheme for empty properties in April 2017 Under this scheme, certain empty commercial properties are eligible for a 100% relief on business rates for the first three months that the property is empty After the initial three-month period, the property owner may be eligible for a further three months of relief at a rate of 50% business rates on empty commercial property. However, after the six-month period has elapsed, the property owner is required to pay the full business rates on the property.
While this relief scheme provides some respite for property owners of empty commercial properties, it is still a temporary measure that may not fully address the financial challenges they face Property owners may continue to struggle with finding tenants for their properties, making it difficult for them to bring their properties back into use and generate rental income.
In addition to the financial burden of paying business rates on empty properties, property owners also face other challenges associated with maintaining vacant properties For example, they may need to invest in security measures to protect the property from vandalism, theft, or other forms of damage They may also need to carry out regular maintenance and repairs to ensure that the property remains in good condition while it is empty.
The government has recognized these challenges and has introduced various measures to support property owners of empty commercial properties For example, local authorities have the power to grant discretionary relief on business rates for certain empty properties This relief is intended to provide additional support to property owners who are facing financial difficulties in bringing their properties back into use.
Property owners can also appeal against the rateable value of their properties if they believe it has been assessed incorrectly by the VOA This process can be complex and time-consuming, but it provides property owners with an opportunity to challenge the amount of business rates charged on their empty commercial properties.
In conclusion, business rates on empty commercial properties can be a significant financial burden for property owners The government’s policy of charging business rates on empty properties is intended to discourage property owners from leaving properties vacant for long periods of time However, this policy has faced criticism from property owners who argue that they are being unfairly penalized for circumstances beyond their control.
Property owners of empty commercial properties may struggle to find tenants for their properties due to economic downturns, changes in market demand, or other external factors The financial strain of paying business rates on empty properties can add to the challenges they face in bringing their properties back into use The government has introduced various relief schemes and support measures to assist property owners, but more needs to be done to address the underlying issues faced by owners of empty commercial properties.