When it comes to owning and managing commercial properties, one of the many challenges that property owners face is dealing with business rates on empty listed buildings. Business rates are a tax that all non-domestic property owners in the UK are required to pay, and they can make a significant dent in a property owner’s finances, especially when the property is sitting empty.
Listed buildings, on the other hand, are properties that are considered to have historical or architectural significance and are therefore protected under the law. This means that owners of listed buildings have certain restrictions placed upon them in terms of what alterations they can make to the property. When you combine these two factors – empty properties and listed status – the issue of business rates becomes even more complex.
So, how exactly do business rates on empty listed buildings work, and what can property owners do to mitigate the impact of these rates? Let’s explore this topic further.
business rates on empty listed buildings are a contentious issue for property owners because they are charged at the same rate as occupied properties. This means that even if a listed building is empty and not generating any income, the owner is still required to pay these rates. For some property owners, this can present a significant financial burden, especially if the property has been on the market for an extended period of time with no takers.
The Government has recognized this issue and has introduced some relief measures to help ease the burden on property owners. One such measure is the 100% business rates relief for the first three months that a property is empty. This provides property owners with a brief window of opportunity to try and find a new tenant or buyer for the property without having to worry about paying business rates.
After the initial three-month period, property owners are required to pay the full business rates on the property. However, if the property is a listed building, owners may be eligible for some additional relief. Listed buildings are often subject to higher maintenance costs due to their historical significance, and as such, owners may qualify for listed buildings relief. This relief can provide a discount on the business rates payable, but the exact amount varies depending on the property’s rateable value.
Property owners of empty listed buildings can also apply for transitional relief, which is designed to help ease the financial burden of significant changes in business rates. Transitional relief works by phasing in any increases in business rates over a period of time, allowing property owners to adjust to the new rates gradually.
Another option for property owners struggling with business rates on empty listed buildings is to explore alternative uses for the property. While listed buildings have restrictions on what alterations can be made to them, there may be opportunities to repurpose the building for a different use that could generate income. For example, a vacant listed building could be converted into a boutique hotel, restaurant, or office space.
To mitigate the impact of business rates on empty listed buildings, property owners should also make sure they are taking advantage of any available exemptions or reliefs. For example, properties that are undergoing major repair or renovation work may be eligible for a business rates exemption for up to 12 months. Alternatively, property owners could consider applying for discretionary rate relief, which is granted on a case-by-case basis by the local authority.
In conclusion, business rates on empty listed buildings can present a significant financial burden for property owners. However, there are relief measures and exemptions available that can help ease this burden and make it more manageable. By exploring all available options and working closely with their local authority, property owners can navigate the complex world of business rates on empty listed buildings more effectively.