Empty listed buildings can be a double-edged sword for property owners. On one hand, they carry a certain prestige and historical significance that can add value to the property. On the other hand, they can be a burden when it comes to paying business rates on a property that is not generating any income.
Business rates are taxes that are levied on most non-domestic properties in the UK, including empty buildings. The rates are based on the rateable value of the property, as assessed by the Valuation Office Agency (VOA). Listed buildings are subject to additional restrictions and regulations that can make it even more complicated to determine how much business rates should be paid on them.
Listed buildings are classified by Historic England as having special architectural or historic interest. There are three grades of listed buildings – Grade I, Grade II*, and Grade II. Grade I buildings are of exceptional interest, Grade II* buildings are particularly important, and Grade II buildings are of special interest. These classifications can have a significant impact on how business rates are calculated for empty listed buildings.
One of the main challenges with business rates on empty listed buildings is the issue of void periods. Property owners are required to pay 100% of the business rates on empty non-domestic properties for the first three months after they become vacant. After this initial period, rates are reduced to 50% for the next three months. However, for listed buildings, special rules apply.
Listed buildings are subject to a 100% exemption from business rates for the first three months after they become vacant. This exemption is intended to give property owners an opportunity to find a new tenant or decide on a new use for the building without being burdened with a hefty tax bill. After the initial three-month exemption period, rates are calculated based on the rateable value of the property, as assessed by the VOA.
The rateable value of a property is based on its rental value as of a certain date. For listed buildings, calculating the rateable value can be more complex due to the additional restrictions and regulations that apply. Grade I and Grade II* listed buildings are likely to have a higher rateable value due to their exceptional architectural or historic interest. Grade II listed buildings may have a lower rateable value, but this can vary depending on the specific characteristics of the building.
Property owners of empty listed buildings may be eligible for certain reliefs or exemptions that can help reduce the amount of business rates they have to pay. For example, listed buildings that are undergoing major repair work or structural alterations may qualify for a 100% exemption from business rates for a specified period. This can provide much-needed financial relief for property owners who are investing in the preservation and restoration of their listed buildings.
In some cases, property owners may be able to apply for discretionary rate relief from their local council. This relief is intended to provide financial support to businesses that are struggling to pay their business rates. However, it is up to the council to decide whether to grant discretionary relief, and the criteria for eligibility can vary depending on the council’s policies and priorities.
Navigating the world of business rates on empty listed buildings can be challenging for property owners. It requires a good understanding of the regulations and exemptions that apply to listed buildings, as well as a proactive approach to managing void periods and applying for relief where possible. Working with a qualified professional, such as a chartered surveyor or a tax advisor, can help property owners navigate the complexities of business rates and ensure that they are paying the correct amount for their empty listed buildings.
In conclusion, the issue of business rates on empty listed buildings is a complex and potentially costly one for property owners. Understanding the regulations and exemptions that apply to listed buildings is essential for managing void periods and reducing the financial burden of paying business rates on empty properties. By working with qualified professionals and being proactive in seeking relief where possible, property owners can navigate the challenging world of business rates on empty listed buildings with confidence.