business rates on empty listed buildings are a hot topic of discussion in the real estate industry. Listed buildings are considered to be of significant historical or architectural importance, and as such, they are protected from demolition or significant alteration. However, what many property owners may not realize is that owning an empty listed building comes with its own set of challenges, particularly when it comes to business rates.
Business rates are a form of property tax that is paid by the occupiers of commercial properties in the UK. The amount of business rates that a property owner has to pay is calculated based on the rateable value of the property, which is set by the Valuation Office Agency (VOA). This rateable value is then multiplied by the uniform business rate, which is set annually by the government.
In the case of empty listed buildings, the situation becomes more complicated. Normally, property owners are entitled to a 100% discount on their business rates for the first three months that a property is empty. After this initial period, they are required to pay the full amount of business rates unless they meet certain criteria that entitle them to further discounts.
However, in the case of empty listed buildings, the rules around business rates are different. Property owners of empty listed buildings are not entitled to the 100% discount that other empty properties receive. This is because listed buildings are considered to have special value due to their historical or architectural significance, and the government does not want to incentivize property owners to leave them empty.
Instead, property owners of empty listed buildings are required to pay the full amount of business rates from day one of the property being empty, with no grace period. This can be a significant financial burden for property owners, particularly if they are struggling to find a new tenant or buyer for the building.
The decision to remove the 100% discount on business rates for empty listed buildings has been controversial, with many property owners arguing that it penalizes them for owning an important piece of history. They argue that the cost of maintaining and preserving a listed building is already high, and that having to pay full business rates on top of this is unfair.
On the other hand, proponents of the current system argue that it is necessary to prevent property owners from leaving listed buildings empty for extended periods of time. They argue that offering a discount on business rates for empty listed buildings would only encourage property owners to keep them empty in the hopes of receiving a financial break.
So, what can property owners of empty listed buildings do to mitigate the impact of business rates? One option is to apply for statutory exemption from business rates. This exemption is granted in certain circumstances, such as when a property is undergoing major repair or structural works. Property owners can also apply for discretionary relief from the local council, although this is not guaranteed.
Another option is to explore alternative uses for the building that may qualify for business rates relief. For example, if the property is used for charitable purposes or as a community asset, it may be eligible for relief. Property owners can also consider leasing the building to a charity or community organization, as these types of tenants may be entitled to relief on business rates.
In conclusion, business rates on empty listed buildings are a complex issue that presents unique challenges for property owners. While the decision to remove the 100% discount on business rates for empty listed buildings may be controversial, it is intended to prevent the misuse and neglect of these important historical and architectural assets. Property owners of empty listed buildings should explore their options for mitigating the impact of business rates, including seeking statutory exemption or exploring alternative uses that may qualify for relief.