Business rates are a complex and often confusing aspect of owning or leasing commercial property. These rates can vary depending on a number of factors, including the location and size of the property. However, there is one particular scenario that can add an extra layer of complexity to business rates: owning an empty listed building.
Listed buildings are structures that have been deemed to have special architectural or historic interest. These buildings are protected by law, and any alterations or renovations must be carefully regulated to preserve their unique characteristics. While owning a listed building can be a point of pride for many property owners, it also comes with its own set of challenges – particularly when it comes to business rates on empty listed buildings.
In the UK, business rates are generally calculated based on the rental value of a property. However, when a property is empty, the business rates can still apply. This can be a major concern for owners of empty listed buildings, as the rates can be substantial and add an additional financial burden.
The rationale behind business rates on empty buildings is to discourage property owners from leaving their buildings vacant for extended periods of time. The government sees empty properties as a waste of valuable resources and aims to incentivize owners to either occupy or redevelop them. While this policy may make sense in principle, it can pose challenges for owners of listed buildings who may face restrictions on what they can do with their properties.
So, what can owners of empty listed buildings do to navigate business rates and mitigate the financial impact? One option is to apply for an exemption or relief. There are several types of relief available, such as empty property relief and listed building relief, which can help reduce the amount of business rates owed on an empty listed building. However, these reliefs are not automatic and must be applied for through the local council.
Empty property relief, for example, can grant owners of empty commercial properties a temporary exemption from paying business rates. Depending on the location, this relief can last for up to three or six months for industrial properties and up to three or six months for other types of commercial properties. Listed building relief, on the other hand, can provide a 100% discount on business rates for buildings that are solely or mainly used for charitable purposes.
Owners of empty listed buildings can also consider ways to generate income from their properties in order to offset the cost of business rates. For example, they may explore temporary leasing options or renting out the space for events. While these strategies may require additional effort and investment, they can help alleviate the financial burden of owning an empty listed building.
In some cases, owners of empty listed buildings may face additional challenges when it comes to business rates. For example, if a listed building is in need of significant repair or renovation, the rateable value of the property may be reduced. This can result in a lower business rates bill, but it can also mean that the property is not generating income while the work is being carried out.
Overall, owning an empty listed building can present unique challenges when it comes to business rates. Owners must navigate the legal requirements and financial implications of owning a listed property, while also considering how to make the most of their investment. By exploring exemptions, relief options, and income-generating strategies, owners of empty listed buildings can better manage the impact of business rates and preserve these historic structures for future generations.