As the owner of a commercial property, one of your biggest costs is likely to be business rates. These rates are set by the government and are based on the rateable value of the property. However, if your property is empty, you may be facing an even greater financial burden in the form of empty rates.
Empty rates are charged on properties that have been empty for a certain period of time, with the goal of encouraging landlords to bring these properties back into use. The rates are intended to provide an incentive for property owners to not let their properties sit vacant for extended periods of time.
However, for property owners who are struggling to find tenants or need to undertake significant renovation works before a property can be let, empty rates can quickly become a financial strain. This is where empty rates mitigation comes in.
empty rates mitigation strategies are designed to help property owners reduce or eliminate the amount of empty rates they have to pay. By implementing these strategies, property owners can save significant amounts of money and better manage their cash flow during periods of vacancy.
One common empty rates mitigation strategy is property guardianship. Property guardianship involves placing individuals or families in vacant properties to act as “guardians” or caretakers. By having people living in the property, the building is no longer considered empty by the local authorities and therefore is not subject to empty rates.
In addition to avoiding empty rates, property guardianship can also help prevent vandalism, squatting, and other forms of property damage that often occur in vacant buildings. This can ultimately save property owners money on maintenance and repairs.
Another empty rates mitigation strategy is temporary occupation. This involves allowing organizations or businesses to use the property for short-term purposes, such as hosting events, pop-up shops, or temporary offices. By generating income from temporary occupation, property owners can offset the cost of empty rates and potentially even make a profit.
Furthermore, property owners can also explore the option of appealing the rateable value of their property to reduce the amount of empty rates they have to pay. This process involves gathering evidence to support a lower rateable value, such as rental income comparables, property condition reports, and market data. While appealing the rateable value can be a lengthy and complex process, it can result in significant savings in the long run.
Additionally, property owners can consider negotiating a rates holiday with their local council. A rates holiday is a temporary suspension of empty rates charges, typically granted for a specific period of time. Property owners must demonstrate a valid reason for the rates holiday, such as undergoing renovation works or actively seeking tenants. While a rates holiday may not eliminate empty rates entirely, it can provide temporary relief during challenging times.
Finally, property owners can explore alternative uses for their vacant properties to generate income and avoid empty rates. This may include converting the property into a different type of use, such as residential, mixed-use, or coworking spaces. By diversifying the use of the property, owners can attract new tenants and reduce their reliance on a single source of income.
In conclusion, empty rates mitigation strategies are essential for property owners looking to minimize their financial burden during periods of vacancy. Whether through property guardianship, temporary occupation, rateable value appeals, rates holidays, or alternative uses, there are various ways to reduce or eliminate empty rates charges. By implementing these strategies, property owners can maximize savings, protect their assets, and effectively manage their properties in today’s competitive market.