When it comes to owning and managing commercial property, one of the key considerations for landlords is the issue of business rates. These are taxes that are levied on non-domestic properties and are used to fund local services. However, there is a special case when it comes to empty listed buildings, which are buildings that are of historical or architectural significance and are therefore protected by law. In this article, we will explore the complexities of business rates on empty listed buildings and what landlords need to know about this issue.
Listed buildings are properties that have been deemed to have special architectural or historical significance by the government. There are three categories of listed buildings in the UK – Grade I, Grade II*, and Grade II. Grade I buildings are considered to be of exceptional interest, Grade II* buildings are particularly important, and Grade II buildings are of special interest. Owners of listed buildings are subject to certain restrictions when it comes to making changes to the property in order to preserve its historical integrity.
One of the major challenges that owners of empty listed buildings face is the issue of business rates. In the UK, business rates are a tax on non-domestic properties that are used to fund local services. However, when a property is empty, the owner is still liable to pay business rates, unless the property falls under certain exemptions. In the case of listed buildings, owners are entitled to an exemption from paying business rates for the first three months that the property is empty. After this initial three-month period, owners are required to pay the full amount of business rates.
This presents a significant financial burden for owners of empty listed buildings, as they are still required to pay business rates even when the property is generating no income. This can be particularly challenging for owners who may be struggling to find tenants for their listed buildings due to their historical significance or the restrictions placed on alterations. In some cases, owners may be forced to sell the property in order to avoid the financial strain of paying business rates on an empty building.
There are ways in which owners of empty listed buildings can reduce the amount of business rates that they are required to pay. One option is to seek a reduction in the rateable value of the property, which is used to calculate the amount of business rates that are due. This can be done by providing evidence to the local council that the property is not capable of generating rental income due to its listed status or other restrictions. Owners can also apply for various reliefs and exemptions that may be available, such as charitable rate relief or small business rate relief.
Another option for owners of empty listed buildings is to consider leasing the property to a charity or community group. In some cases, properties that are leased to certain types of organizations may be eligible for exemptions from paying business rates. This can be a win-win solution, as the property is put to good use and the owner is relieved of the burden of paying business rates on an empty building.
It is important for owners of empty listed buildings to be aware of their rights and obligations when it comes to business rates. Failure to pay business rates on an empty listed building can result in legal action being taken against the owner, including the seizure and sale of the property. Seeking advice from a professional advisor or property management company can help owners navigate the complexities of business rates and ensure that they are in compliance with the law.
In conclusion, business rates on empty listed buildings can be a significant financial burden for owners, who are still required to pay these taxes even when the property is generating no income. However, there are ways in which owners can reduce the amount of business rates that they are required to pay, such as seeking a reduction in the rateable value of the property or applying for reliefs and exemptions. By understanding their rights and obligations, owners of empty listed buildings can navigate the complexities of business rates and ensure that they are in compliance with the law.