Empty commercial property fees, also known as business rates, can be a significant financial burden for property owners. These fees are charged by local councils on commercial properties that are not being used or occupied. The intention behind these fees is to encourage property owners to either put their properties to use or sell them, thereby reducing the number of empty properties in the area. However, navigating empty commercial property fees can be complex and confusing for many property owners. In this article, we will delve into what you need to know about empty commercial property fees and how you can effectively manage them.
Understanding empty commercial property fees
Empty commercial property fees are calculated based on the rateable value of the property. The rateable value is determined by the Valuation Office Agency (VOA) and is an estimate of the property’s open market rental value at a specific date. The rateable value is then used by the local council to calculate the amount of business rates that need to be paid on the property.
In most cases, empty commercial property fees are charged at a higher rate than occupied properties. This is because empty properties are seen as a drain on resources and a blight on the local community. By charging higher fees on empty properties, local councils hope to incentivize property owners to bring their properties back into use.
Managing empty commercial property fees
If you own a commercial property that is currently empty, there are several strategies that you can employ to effectively manage the empty property fees:
1. Negotiate a Reduced Rate
In some cases, local councils may be willing to negotiate a reduced rate on empty property fees. This is especially true if you can demonstrate that you are actively seeking tenants for the property or that there are extenuating circumstances that prevent you from occupying the property. It is always worth reaching out to the local council to see if they are willing to be flexible on the fees.
2. Apply for Exemptions or Relief
There are certain circumstances in which commercial property owners may be eligible for exemptions or relief on empty property fees. For example, if the property is undergoing significant repairs or renovations, you may be able to apply for a temporary exemption. Additionally, if the property is deemed unfit for occupation, you may be eligible for relief on the fees. It is important to research the specific exemptions and relief options that may be available to you in your area.
3. Consider Renting Out the Property
One of the most effective ways to reduce empty property fees is to rent out the property. By generating rental income from the property, you can offset the costs of the empty property fees. Additionally, having a tenant in the property may make you eligible for certain discounts or relief on the fees. Before renting out the property, be sure to check with the local council to ensure that you are in compliance with any regulations or requirements.
4. Explore Other Revenue Streams
If renting out the property is not a viable option, consider exploring other revenue streams that can help offset the empty property fees. For example, you may be able to lease out a portion of the property for temporary events or pop-up shops. Alternatively, you could consider using the property for storage or as a coworking space. By thinking outside the box, you may be able to generate income from the property while still complying with empty property fee regulations.
Conclusion
Empty commercial property fees can be a significant financial burden for property owners, but with careful planning and strategizing, they can be effectively managed. By understanding how empty commercial property fees are calculated and exploring options for reducing or offsetting the fees, property owners can navigate this complex landscape successfully. Whether through negotiating reduced rates, applying for exemptions, renting out the property, or exploring alternative revenue streams, there are a variety of ways to effectively manage empty commercial property fees. By taking proactive steps to address empty property fees, property owners can not only reduce their financial burden but also contribute to the revitalization of their local community.