When it comes to owning commercial property, one of the biggest expenses that landlords and business owners face is business rates. In the UK, business rates are taxes that are levied on most non-domestic properties, and they are used to help fund local services. However, one of the most controversial aspects of business rates is the treatment of empty commercial properties.
Empty commercial properties are subject to business rates just like properties that are being used for business activities. This can often put a strain on landlords and property owners, especially during times when vacancies are high and finding tenants becomes difficult. In this article, we will explore the implications of business rates on empty commercial property and discuss some strategies that landlords can use to navigate this challenge.
One of the main arguments against charging business rates on empty commercial properties is that it can discourage landlords from investing in or improving their properties. When landlords are already facing financial pressures due to vacancies, having to pay additional taxes on those empty properties can make it even more difficult to make a profit. This can have a negative impact on the overall economy, as it may discourage property owners from investing in their buildings or seeking new tenants.
In response to these concerns, the UK government has implemented some measures to help alleviate the burden of business rates on empty commercial properties. For example, in recent years, the government has introduced various reliefs and exemptions for certain types of properties, such as newly built properties or properties that are undergoing renovation. These measures are designed to encourage property owners to invest in their buildings and bring them back into use, rather than leaving them empty.
One important exemption to note is the new 50% business rates relief that was introduced for retail properties in April 2019. This relief applies to properties that have a rateable value of less than £51,000 and are used for retail purposes, such as shops, restaurants, and cafes. This relief can help businesses that are struggling in the current economic climate, as it provides some much-needed financial support for those who may be facing challenges due to high business rates.
In addition to these exemptions and reliefs, property owners can also explore other strategies to help reduce the impact of business rates on their empty commercial properties. For example, landlords can consider applying for empty property relief, which provides a 100% exemption on business rates for certain types of properties that have been empty for a certain period of time. This relief can be a lifeline for landlords who are struggling to find tenants for their properties and are facing high business rates bills as a result.
Another option for property owners is to consider leasing their empty commercial properties to charities or community organizations. In the UK, properties that are used by registered charities or community amateur sports clubs are eligible for an 80% mandatory relief on business rates. By leasing their properties to these types of organizations, landlords can reduce their business rates bills and help support valuable community services at the same time.
Overall, navigating business rates on empty commercial property can be a challenging task for landlords and property owners. However, by taking advantage of the various reliefs and exemptions that are available, as well as exploring other strategies such as leasing to charities, landlords can help mitigate the financial impact of business rates on their empty properties. It is important for property owners to stay informed about the latest developments in business rates policy and to seek professional advice if needed to ensure that they are taking full advantage of all available options. By doing so, landlords can help protect their investments and contribute to a thriving commercial property market.
In conclusion, while business rates on empty commercial properties can be a significant financial burden for landlords, there are ways to navigate this challenge and minimize the impact on their properties. By staying informed and taking advantage of available reliefs and exemptions, landlords can help protect their investments and support the overall economy. With the right strategies in place, landlords can turn empty commercial properties into valuable assets that contribute to the growth and development of their local communities.