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Hope for vacant properties

Monday, June 29, 2009

Source: Catherine Deshayes

British commercial landlords are languishing under the abolition of rate relief on vacant properties during 2008, when the economic downturn began, according to a report from the Liverpool Daily Post...

Precisely because of the downturn, many landlords now have properties that have been vacant for long periods of time. They also have to pay rates on these properties.

While one option is to demolish the buildings, it is hardly viable in cases where the property is part of a wider estate. It also makes little sense to demolish a property that is valuable and will be costly to rebuild.

The article offers two alternatives that landlords may find more appealing.

One option is to find occupants on the short term. A vacant property that becomes occupied for six weeks, and for which rates are paid during this period, is eligible for three months of rate relief after it has been vacated. For industrial buildings, the rate relief applies for six months.

The article notes that landlords can continue this cycle indefinitely, although it is possible that the method may be challenged in the future.

Another option is to let the property to a charity. Charities using property space are eligible for an 80 per cent rate relief, while the rating authority can also provide a further 20 per cent reduction, bringing the payable rate to zero.

When the charity vacates the building, there will be no rates required, provided that its subsequent use is also mainly charitable.

These strategies will help landlords to mitigate the toll that vacant property rates take on their business.

Source: www.hotproperty.co.uk