When it comes to owning and managing commercial properties, the issue of business rates is a significant concern for many property owners. Business rates are taxes that are levied on non-domestic properties to help fund local services. These rates can have a considerable impact on the profitability of a property, especially when it comes to empty listed buildings.
Listed buildings are those that are considered to have special architectural or historic interest and are protected by law. While owning a listed building can come with prestige and benefits, it also comes with its own set of challenges, particularly when it comes to business rates on empty properties.
Business rates are calculated based on the rateable value of a property, which is determined by the Valuation Office Agency. When a property is empty, the owner is still required to pay business rates, but they may be eligible for relief. However, this relief is not automatic and must be applied for separately.
For listed buildings, the situation is slightly different. Listed buildings are often subject to higher maintenance costs due to their historic nature, which can make them challenging to lease out. As a result, many listed buildings remain empty for extended periods of time. In these cases, owners may find themselves paying hefty business rates on properties that are not generating any income.
One of the reasons why business rates on empty listed buildings can be particularly burdensome is that owners are often limited in their ability to make changes to the property. Listed building consent is required for any alterations or renovations to a listed building, and this process can be lengthy and costly. This means that owners may be stuck with an empty building that they are unable to modify or improve in order to attract tenants.
In recognition of the challenges faced by owners of empty listed buildings, the government has introduced various relief schemes to help alleviate some of the financial burden. One such relief scheme is the Listed Building Heritage Relief, which provides relief on the business rates payable on a listed building that is being renovated.
In order to qualify for this relief, the property must be a listed building that is undergoing or is about to undergo substantial renovation. The relief is granted for a period of 12 months and can be extended for a further 12 months if the renovation work is not completed within the initial relief period.
Another relief scheme is the Section 44A Exemption, which provides relief on the business rates payable on empty listed buildings. This relief is available to properties that have been empty for a continuous period of 3 months or more, and can provide relief for up to 6 months.
While these relief schemes can provide some assistance to owners of empty listed buildings, they are not a long-term solution to the problem of high business rates. Owners of listed buildings are still faced with the challenge of maintaining and managing a property that may be difficult to lease out, and may continue to incur significant costs even when the property is empty.
In recent years, there has been a push for reform of the business rates system in the UK, with many calling for a fairer and more equitable system that takes into account the challenges faced by owners of listed buildings. However, any changes to the business rates system would require careful consideration and consultation with stakeholders to ensure that they do not have unintended consequences.
In the meantime, owners of empty listed buildings must continue to navigate the complexities of the business rates system and make use of the relief schemes available to them. While these relief schemes can provide some temporary respite, ultimately the best solution for owners of empty listed buildings is to find ways to bring their properties back into productive use. By doing so, they can not only reduce their business rates liability but also contribute to the preservation and revitalization of our built heritage.
In conclusion, business rates on empty listed buildings can be a significant financial burden for property owners, particularly when combined with the challenges of maintaining and managing a listed building. Relief schemes are available to help alleviate some of this burden, but ultimately the best solution is to find ways to bring these empty buildings back into productive use. Through careful planning and consideration, property owners can navigate the complexities of the business rates system and find ways to make their listed buildings assets that contribute to the local community and economy.