Business rates are a tax imposed by local authorities on non-domestic properties in the UK. The amount of business rates that a property owner has to pay is based on the rateable value of the property. However, when it comes to empty listed buildings, the situation can become a bit more complicated.
Listed buildings are those that have been recognised by Historic England as having special architectural or historic interest. These buildings are protected by law, and any alterations or renovations to them must be approved by the local planning authority. While listing provides protection for these buildings, it also comes with certain responsibilities for their owners, including the payment of business rates even when the building is empty.
The issue of business rates on empty listed buildings has long been a contentious one. Many property owners argue that it is unfair to levy business rates on properties that are not generating any income. This can be particularly burdensome for owners of listed buildings, as the cost of maintaining and preserving these properties is often higher than for non-listed properties.
In response to these concerns, the government introduced a temporary exemption for listed buildings in 2017. This exemption meant that owners of empty listed buildings would not have to pay business rates for the first three months that the property was empty. After this initial three-month period, owners would have to pay the full business rate unless they were able to demonstrate that the building was being actively marketed for sale or rent.
While this exemption provided some relief for owners of empty listed buildings, many argued that it did not go far enough. Some property owners found it difficult to meet the criteria for proving that their building was actively being marketed, and as a result, they were still liable for the full business rate.
In response to these concerns, the government announced in 2020 that it would extend the exemption for empty listed buildings to 18 months. This extension was intended to provide further relief for property owners during the challenging economic conditions caused by the COVID-19 pandemic.
Despite these concessions, the issue of business rates on empty listed buildings continues to be a point of contention. Property owners argue that the current system penalises them for owning and preserving historic buildings, and that it puts them at a disadvantage compared to owners of non-listed properties. They argue that the cost of maintaining listed buildings is already high, and that the additional burden of business rates on empty properties makes it even more difficult to keep these buildings in good condition.
On the other hand, some argue that exempting empty listed buildings from business rates would create an incentive for owners to leave their properties vacant, rather than putting them to productive use. They argue that business rates are an important source of revenue for local authorities, and that exempting certain properties from these rates would reduce the funds available for providing essential services to the community.
Finding a balance between these competing interests is a complex task. Balancing the need to preserve our historic buildings with the need to generate revenue for local authorities is a challenge that requires careful consideration. Some have suggested that a more nuanced approach to business rates on empty listed buildings could help to address these concerns.
One possibility is to introduce a sliding scale of business rates for empty listed buildings, based on the length of time that the property has been vacant. For example, the rate could be reduced for the first few months that the property is empty, with the full rate only applying after a certain period of time. This would incentivise property owners to actively market their buildings for sale or rent, while still providing some relief for those who are struggling to find a tenant.
Another option is to provide more support and advice for property owners on how to meet the criteria for the exemption. Many owners of listed buildings are passionate about preserving our heritage, but they may not have the expertise or resources to effectively market their properties. By offering guidance and support, local authorities could help these owners to meet the criteria for the exemption and reduce the financial burden on them.
Regardless of the approach taken, it is clear that the issue of business rates on empty listed buildings is a complex one that requires careful consideration. Finding a balance between the need to preserve our historic buildings and the need to generate revenue for local authorities is a challenge that requires collaboration between property owners, local authorities, and government bodies. By working together, we can find a solution that supports the preservation of our historic buildings while also ensuring a fair and sustainable system of business rates for all properties.