On the 1st of April 2023, all commercial properties will be reassessed for business rates based on rental values estimated in April 2021. This is the first revaluation since 2017 which itself was based on values calculated in 2015, and look at what has happened since then. Brexit, the Pandemic and lockdown, the war in Ukraine and the resultant energy and cost of living crisis.
In addition to the above, the new 2023 rateable values are not the only factor that will affect rates liabilities from next April. Each year the multiplier used to calculate the rates payable for individual properties can be increased by up to the rate of inflation in the preceding September. Since that was just over 10%, this could result in a substantial increase in liability even for properties where the rateable value has remained the same or reduced as a result of the revaluation.
Because parts of the business world are still in trouble, especially in the hospitality and retail sector, as well as the ongoing pros and cons of working from home, there are a whole slew of commercial properties currently sitting vacant while their owners try to decide what to do with them. Should landlords sit tight and wait for things to turn around, redevelop or sell up? With interest rates rising and their impact on mortgage rates, the cost of property development is also going up and funding more difficult to source and pay for.
In short, no one can forecast what is the right thing to do at the moment, but one thing definitely won’t change; if a property has been vacant for over three months, or six months if it is industrial, the landlord will be liable for 100% of the business rates payable.
However, while vacant property owners scratch their heads and dither, and groan at their increased overheads while not getting any return on their investments, there is one solution we can offer.
If your property is likely to be vacant for at least 6 months, hand it over to us temporarily. Not only will we ensure it is secured and maintained, we can also temporarily change its liability for business rates, simply by installing property guardians because it becomes a residential property. One less expense for you to worry about. Hard pressed but responsible working people will have an affordable home to live in for a while and property owners can sit tight until the time is right for them to make the best decision on the future of their building… to sell, re-let, convert or re-develop.