Void business rates, also known as empty property rates, can be a significant concern for property owners and businesses alike. These rates are imposed on commercial properties that are unoccupied for an extended period of time, and can add a substantial financial burden to the owner. In this article, we will explore what void business rates are, how they are calculated, and what you can do to minimize their impact on your business.
What are void business rates?
Void business rates are a type of tax that is levied on commercial properties that are vacant for a certain period of time. The rates are meant to discourage property owners from leaving their buildings unoccupied for extended periods, as vacant properties can have a negative impact on the local economy and community. By imposing void business rates, local authorities aim to encourage property owners to bring their buildings back into use or to rent them out to new tenants.
How are void business rates Calculated?
Void business rates are typically calculated based on the rateable value of the property. The rateable value is an estimate of the annual rental value of the property, as determined by the Valuation Office Agency (VOA). The amount of void business rates that will be charged on an empty property depends on the rateable value of the property, as well as the specific rules and regulations set by the local authority.
In England, for example, empty commercial properties with a rateable value of less than £2,900 are exempt from void business rates for three months. After this initial three-month period, the property owner will be required to pay the full rate of business rates on the property. In Scotland and Wales, different rules and regulations may apply, so it is important to check with the relevant local authority to determine the specific requirements for void business rates in your area.
Implications for Property Owners and Businesses
Void business rates can have a significant financial impact on property owners and businesses. In addition to the regular costs associated with owning a property, such as maintenance, repairs, and insurance, property owners must also factor in the additional expense of void business rates when their property is unoccupied. For businesses that are struggling to find tenants or are in the process of renovating a property, void business rates can add to the financial strain and make it more difficult to turn a profit.
Furthermore, the imposition of void business rates can also have a negative impact on the local community. Vacant properties can detract from the visual appeal of a neighborhood, attract vandalism and squatting, and create a sense of blight in the surrounding area. By imposing void business rates, local authorities hope to incentivize property owners to take action to bring their buildings back into use and contribute to the revitalization of the community.
Minimizing the Impact of void business rates
While void business rates can be a significant financial burden, there are steps that property owners and businesses can take to minimize their impact. One option is to apply for an exemption or relief from void business rates, if you meet certain criteria. For example, properties that are undergoing renovation or are in the process of being redeveloped may be eligible for a temporary exemption from void business rates.
Property owners can also explore other options for reducing the impact of void business rates, such as leasing their property to a charity or community organization. In some cases, properties that are being used for charitable purposes may be eligible for relief from void business rates. By exploring these and other options, property owners can potentially reduce the financial burden of void business rates and contribute to the overall well-being of their community.
In conclusion, void business rates can be a significant concern for property owners and businesses, as they represent an additional financial burden on unoccupied commercial properties. By understanding what void business rates are, how they are calculated, and what steps you can take to minimize their impact, property owners can better navigate the challenges of owning and managing vacant properties. Remember to check with your local authority for specific rules and regulations regarding void business rates in your area, and explore all available options for reducing the financial strain of empty property rates.