empty property rates, also known as Business Rates on Empty Properties, is a significant issue that affects many property owners and investors. These rates are a form of tax that is imposed on properties that are not being used or occupied. In this article, we will discuss what empty property rates are, how they are calculated, and what property owners can do to minimize their impact.
Empty property rates are a tax that is levied by local authorities on properties that are unoccupied and not being used for business purposes. The purpose of these rates is to encourage property owners to make use of their properties and reduce the number of vacant properties in an area. By imposing empty property rates, local authorities aim to stimulate economic activity and prevent properties from falling into disrepair.
The calculation of empty property rates can vary depending on the location of the property and the local authority regulations. In general, the rateable value of the property is used as the basis for calculating the empty property rates. The rateable value is an estimate of the rental value of the property, and it is determined by the Valuation Office Agency (VOA) in England, the Scottish Assessors in Scotland, and the Land and Property Services in Northern Ireland.
Once the rateable value of the property is determined, it is multiplied by a multiplier set by the government to arrive at the empty property rates payable by the property owner. The multiplier is usually a percentage of the rateable value, and it can vary from one region to another. Property owners are required to pay empty property rates on a quarterly basis, even if the property remains unoccupied.
Property owners can apply for exemptions or reliefs to reduce or eliminate the impact of empty property rates. Some of the common exemptions include properties that are exempt from Business Rates altogether, such as agricultural land and buildings, properties that are undergoing major repairs or structural changes, and properties that are owned by charities or community amateur sports clubs.
In addition to exemptions, property owners can also apply for reliefs to reduce the amount of empty property rates payable. The most common relief is the 100% Small Business Rate Relief, which applies to properties with a rateable value below a certain threshold. Property owners can also apply for the 100% Charitable Rate Relief if the property is used for charitable purposes.
Another option for property owners to reduce the impact of empty property rates is to consider leasing or renting out the property. By finding a tenant for the property, property owners can generate rental income and avoid paying empty property rates. However, property owners should be aware of the risks associated with renting out a property, such as property damage, non-payment of rent, and legal disputes with tenants.
Property owners can also consider selling the property to avoid paying empty property rates. By selling the property, property owners can recoup their investment and avoid ongoing expenses associated with maintaining an empty property. However, selling a property may take time, and property owners should be prepared to wait for the right buyer to come along.
Overall, empty property rates can be a significant financial burden for property owners, especially during times of economic downturn or property market stagnation. Property owners should explore all available options to minimize the impact of empty property rates, such as applying for exemptions, reliefs, leasing out the property, or selling the property. By taking proactive steps to address empty property rates, property owners can protect their investments and avoid unnecessary expenses.