Empty listed buildings often come with a tax burden that many property owners may not be aware of – business rates. While having a listed building can bring with it prestige and historical significance, it can also come with financial obligations that property owners need to understand and plan for. In this article, we will delve into the world of business rates on empty listed buildings and explore what property owners need to know to manage this aspect of their property ownership.
Listed buildings are those that have been officially recognized as having historical or architectural significance by the relevant authorities. These buildings are usually protected by law, meaning that any changes or alterations to them must be approved by the authorities to ensure that their historical and architectural value is preserved. However, while having a listed building can offer prestige and admiration from the community, it can also bring with it various challenges, one of which is paying business rates on empty properties.
Business rates are taxes that property owners in the UK have to pay on most non-domestic properties, including shops, offices, factories, and warehouses. This tax is calculated based on the rental value of the property and is used to fund local services such as schools, roads, and waste collection. However, when it comes to empty properties, including empty listed buildings, the rules around business rates can be somewhat different.
In the case of empty non-domestic properties, property owners are entitled to a 100% relief on their business rates for the first three months that the property is empty. After this initial three-month period, property owners have to start paying the full business rates unless they are granted an exemption. For listed buildings, property owners are entitled to a longer period of relief – six months instead of three. This extended relief period is designed to give property owners more time to find a new tenant or buyer for their listed building without having to pay full business rates on the property.
However, after the six-month relief period has expired, property owners of empty listed buildings are faced with the challenge of paying the full business rates on their property. This can be a significant financial burden, especially for those who may have listed buildings that are difficult to sell or rent out due to their historical or architectural value. In some cases, property owners may find themselves paying business rates on empty listed buildings for years without any income coming in from the property.
One way that property owners can potentially reduce their business rates liability on empty listed buildings is by applying for an exemption. Exemptions from business rates can be granted in certain circumstances, such as when a property is undergoing major repair or structural work that makes it uninhabitable. Property owners may also be able to apply for an exemption if they can demonstrate that the property is genuinely on the market for sale or rent and that they are actively marketing it to potential buyers or tenants.
It is important for property owners of empty listed buildings to be aware of their rights and responsibilities when it comes to business rates. Ignoring or neglecting to pay business rates on an empty listed building can lead to severe consequences, including legal action, fines, and even the repossession of the property by the local authority. Property owners should seek advice from a professional, such as a chartered surveyor or a tax advisor, to ensure that they are compliant with the regulations and to explore any potential avenues for reducing their business rates liability.
In conclusion, business rates on empty listed buildings can be a significant financial burden for property owners, but they are also a necessary tax that contributes to funding local services. Property owners of empty listed buildings should be aware of their rights and responsibilities when it comes to business rates and should explore all available options for reducing their liability. Seeking professional advice and staying informed about the regulations can help property owners navigate the world of business rates on empty listed buildings and ensure that they are compliant with the law.