When it comes to owning and managing commercial properties, there are many factors to consider. From maintenance costs to rent prices, property owners have a lot on their plates. One often overlooked aspect of owning commercial property is the business rates that are charged on empty listed buildings. These rates can be a significant financial burden for property owners, especially when the property is sitting vacant. In this article, we will explore what business rates are, how they are calculated, and what property owners can do to minimize the impact of empty property rates on their bottom line.
Business rates, also known as non-domestic rates, are taxes that are charged on most non-domestic properties, including commercial properties like shops, offices, and warehouses. These rates are used to fund local services and infrastructure, much like council tax is used for residential properties. The amount of business rates that a property owner must pay is determined by the rateable value of the property, which is set by the Valuation Office Agency (VOA). The rateable value is based on the rental value of the property, as determined by the VOA.
One issue that property owners face is that they are required to pay business rates on empty listed buildings. Listed buildings are those that are of special architectural or historical significance and are protected by law. While owning a listed building can be a point of pride for property owners, it also comes with extra responsibilities and costs. One of these costs is business rates, even if the building is empty.
So, how are business rates on empty listed buildings calculated? The rules around business rates on empty properties are complex and can vary depending on the specific circumstances of the property. In general, property owners are required to pay business rates at the full rate for the first three months that the property is empty. After three months, the rateable value is reduced by 100% for properties that are listed buildings. This can provide some relief for property owners, but it is still a significant cost for properties that remain empty for long periods of time.
Property owners may be eligible for exemptions or reliefs that can help to reduce the impact of business rates on empty listed buildings. For example, properties that are undergoing major structural repairs or are in a state of disrepair may be eligible for a full exemption from business rates for a set period of time. Property owners should check with their local council to see if they qualify for any exemptions or reliefs.
Another option for property owners is to apply for Listed Building Heritage Relief. This relief is available for listed buildings that are being used for charitable purposes, or are being brought back into use after standing empty for a certain period of time. Property owners may be eligible for a discount of up to 100% on their business rates if they meet the criteria for Listed Building Heritage Relief. This can provide significant savings for property owners who are struggling to afford the business rates on their empty listed buildings.
In some cases, property owners may consider leasing their empty listed buildings to another party in order to generate some income and avoid paying the full business rates themselves. However, property owners should be aware that they may still be liable for a portion of the business rates, even if the property is leased to another party. It is important for property owners to carefully review the terms of any lease agreements and seek legal advice if necessary to ensure that they are not bearing an unfair burden of the business rates.
Overall, business rates on empty listed buildings can be a significant financial burden for property owners. However, there are options available to help reduce the impact of these rates, including exemptions, reliefs, and Listed Building Heritage Relief. By understanding the rules around business rates on empty properties and exploring all available options, property owners can better navigate the complexities of owning and managing listed buildings.