When it comes to commercial property ownership, there are a multitude of costs that come with it. One of the largest expenses that property owners often face is business rates. Business rates are charged on most non-domestic properties, including commercial properties like shops, offices, and warehouses. However, what happens when a commercial property sits empty? Are rates still payable on empty commercial property?
The short answer is yes, rates are still payable on empty commercial property. This is because business rates are a tax that local authorities charge on most non-domestic properties to help fund local services. The rates are typically based on the rateable value of the property, which is an estimate of its open market rental value as of a certain date. The rates payable on empty commercial property are usually 100% of the normal rates bill for the property.
Many property owners are surprised to learn that they still have to pay rates on empty commercial property. However, there are some exceptions to this rule. For example, if a property is newly built and has not yet been occupied, it may be eligible for a full exemption from business rates for the first three months after completion. After this initial period, the property owner will be required to pay the full rates bill unless the property meets the criteria for an extended empty property rate relief.
Some properties may also be eligible for a rate relief scheme called the empty property rate relief. This scheme provides a full exemption from business rates for certain types of empty properties, such as industrial premises, listed buildings, and properties with a rateable value of less than £2,900. However, it is important to note that each local authority has its own criteria for determining which properties are eligible for rate relief, so property owners should check with their local authority to see if they qualify.
Property owners who are struggling to pay the rates on their empty commercial property may also be able to apply for hardship relief. This is a discretionary relief scheme that local authorities can grant to property owners who are experiencing financial difficulties. To qualify for hardship relief, property owners must demonstrate that they are unable to pay the rates due to financial hardship, and provide evidence of their financial circumstances.
It is important for property owners to be aware of their obligations when it comes to paying rates on empty commercial property. Failure to pay the rates on an empty property can result in penalties and enforcement action by the local authority, including legal proceedings and the possibility of having the property seized and sold to cover the outstanding rates. Property owners should also be aware that rates are payable even if the property is being marketed for sale or let, as this does not exempt the property from rates liability.
In conclusion, rates are payable on empty commercial property, although there are some exceptions and relief schemes available for property owners who qualify. Property owners should be aware of their obligations when it comes to paying rates on empty property and should seek advice from their local authority if they are struggling to pay. By understanding the rules and regulations surrounding rates payable on empty commercial property, property owners can avoid potential penalties and enforcement actions and ensure that they are in compliance with their legal obligations.