Business rates on business/commercial properties
 

Hi guys!

Just a quick question which I'm sure some of you will know the answer to...

In Canada does the business rates system work the same as in the UK, that is to say that the rates are always due regardless of whether the property has a client in, in which case it is still due but the landlord has to foot the bill?

Asking as starting to take a look as what sorts of investment properties might work well for us, and have seen a few shops with 2-4 residential rental units above - which would be ideal for our investment, BUT don't want to start footing business rates if the shop was empty, so might rule out that type of property comppletely for us...

I've always thought that the UK rules with business rates are ridiculous and unfair on landlords, so hoping with crossed fingers that Canda has a more sensible solution?

Thanks guys!

Re: Business rates on business/commercial properties
 

Property tax is due payable on a monthly or yearly basis on commercial and residential buildings. If you own or rent commercial space the taxes will either be included within your monthly rent (which is what I've always paid on commercial space I've rented in Canada), or they'll be the responsibility of the landlord to pay, depending on what you've negotiated within the lease. If you own the property there's no break on the tax just because the space isn't generating any income.

Why would it be fairer not to pay taxes just because you don't happen to have a tenant?

Re: Business rates on business/commercial properties
 

Yup.

Have you made the move back yet Senhor? it says Kamloops...

Re: Business rates on business/commercial properties
 

End of 1st week back - job and house hunting underway.

Re: Business rates on business/commercial properties
 

Woohoo ! Good luck on both. Saw some snowdrops yesterday so warmer weather is just around the corner.

Re: Business rates on business/commercial properties
 

Thanks for the info - much appreciated! Interesting that the business rates are included in the rental, unlike the UK where generally the renter has to pay the rates.

It's always seemed unfair to me that, as a Landlord, you can have an empty space through no fault of your own costing you thousands of pounds.

I know some area's in the UK do small business relief on rates, so the rates are close to zero during the rate relief period to help businesses establish and grow. But these kinds of breaks are never passed on to the Landlord.

It makes buying a commercial property a far riskier endeavour as if it's not full then it could cost you hundreds, or even thousands, per month.

Just seems unfair on the surface of it, and would put people off of investing in certain types of property. Maybe that's why they do it.

Re: Business rates on business/commercial properties
 

Given there's an exemption for 3 months (or 6, or indefinitely, in some circumstances) it seems fair enough to me. Should be enough time for a landlord to find new tenants if the space is attractively priced.

Re: Business rates on business/commercial properties
 

Ah, well that's certainly a big help :-)

Re: Business rates on business/commercial properties
 

As an ex landlord who paid double taxes (in this province) regardless of whether I actually had a tenant, I can sympathise, but what if it is your own fault? Or partly. Who makes that decision? And if you don't pay, who does make up the loss to public funds, because someone will have to.

So long as you know it happens, you just have to build it in to your expenses as you would with other costs.

Re: Business rates on business/commercial properties
 

The small town I lived in had so much empty commercial space I had no idea how the landlords were managing given the rates were probably in the £Ks. Note that rate relief isn't available on empty commercial properties.

Re: Business rates on business/commercial properties
 

Agree that it can be a deterant to landlords to stop them leaving the properties empty and to wrack and ruin, and that is absolutely fair enough and correct.

Maybe a 'fair' period to get it rented again of up to 12 months, or 24 months in quieter regions, as dictated by local council.

3 months is often not enough to get a commercial property rented out in realistic terms. If local councils want to get landlords to invest in commercial properties to help increase economy, boost areas etc then seems like a logical solution to give them some breaks rather than screw them over for thousands if they have not managed to rent it out again within 12 weeks.

Only an opinion, and of course everyone's is different :-)

Re: Business rates on business/commercial properties
 

Are you talking about the UK or Canada? In the UK it depends on the property. All commercial properties get 3 months relief when empty, others get 6 months (i.e. warehouses), other get indefinitely (those under a certain rateable value, listed buildings etc).

I'm a landlady and seems fair enough to me tbh.

Re: Business rates on business/commercial properties
 

UK. was talking about UK as tenants pay the rates here.

I was wondering this because many properties have been empty for years. The property we rented for our business had been empty for 5 years!

The crash in 2008 has really done a number on this place IMHO.

Re: Business rates on business/commercial properties
 

Yes, likewise the industrial unit we left 3.5 years ago is still empty but openly advertised and very reasonably (re cheap) rent.

We were there two years and the landlord will have lost all our rent and more due to it being empty. Makes you wonder why they bother.

Imagine 5 years of business rates as a landlord through no fault of your own when you are actively trying to rent it out. That really, really sucks.

Re: Business rates on business/commercial properties
 

Speaking as someone who knows several people who rent or lease property, and have to pay the business tax PLUS the property tax ....

....... the system here in BC due to the rapid increase in property tax caused by the inflated development market means that many small business owners are not renewing leases, and are shutting up shop ........... leaving empty spaces.

As a consumer / user of businesses that leaves me in a quandary.

Why ask a small shop, restaurant or coffee shop to find the money to pay $5,000 a month property tax?


I have actually begun to wonder why the owner of a building should be able to pass on to his / her tenant the full cost of business or property taxes