Business rates are a controversial subject for many property owners, especially when it comes to empty listed buildings. Listed buildings are protected structures that are of historical or architectural importance, meaning they cannot be significantly altered without permission from the local planning authority. While they hold significant value in terms of preserving our cultural heritage, they can also present challenges for property owners, particularly when it comes to business rates.
Business rates are a tax on non-domestic properties, including commercial properties, and are payable by the owner or occupier of the building. The rates are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency (VOA) and reviewed every five years. However, if a listed building is left empty, owners still have to pay business rates on the property, regardless of whether it is generating any income.
The rationale behind this policy is to deter property owners from leaving buildings empty for extended periods of time, as it is believed that this can have a negative impact on the surrounding area and economy. Empty buildings can attract anti-social behaviour, vandalism, and can drag down the overall appeal of an area. By imposing business rates on empty properties, the government aims to encourage owners to bring their properties back into use or to sell them to someone who will.
However, this policy has faced criticism from property owners who argue that it disproportionately affects listed buildings. Listed buildings often require significant investment and maintenance to preserve their historic features, making them more costly to develop and lease than non-listed properties. This means that owners of listed buildings may struggle to find tenants willing to take on the financial burden of renting a listed property, especially if they also have to pay business rates on top of the rent.
Furthermore, in some cases, owners of listed buildings may not be able to make significant alterations to the property to make it more attractive to potential tenants, as this could breach the terms of their listing. This can further limit the options available to owners in terms of finding a suitable tenant for their property.
The issue of business rates on empty listed buildings has become even more pressing in recent years, as many property owners have found themselves struggling to keep their properties occupied during the economic uncertainty caused by the COVID-19 pandemic. Lockdowns and restrictions have forced many businesses to close their doors temporarily or even permanently, leaving commercial properties empty and owners facing hefty business rates bills.
In response to these challenges, some property owners have called for a reform of the business rates system to make it fairer for owners of listed buildings. They argue that the current system penalizes owners who are already facing significant costs associated with maintaining and preserving these historic structures, and that this could ultimately lead to more listed buildings falling into disrepair or being lost altogether.
One proposed solution is to introduce exemptions or discounts on business rates for owners of listed buildings who are struggling to find tenants or who are unable to bring their properties back into use due to restrictions imposed by their listing. This could provide much-needed relief for owners who are facing financial difficulties as a result of the pandemic and could help to preserve our built heritage for future generations.
Another option is to provide financial incentives for owners of listed buildings to bring their properties back into use, such as grants or tax breaks for restoration or renovation projects. This could help to make it more financially viable for owners to invest in their properties and attract tenants who are willing to pay higher rents for the privilege of occupying a historic building.
Overall, the issue of business rates on empty listed buildings is a complex one that requires careful consideration and a balanced approach. While it is important to encourage owners to bring their properties back into use, it is also crucial to ensure that the burden of business rates does not become a barrier to the preservation of our built heritage. By working together to find solutions that support property owners while also protecting our historic buildings, we can ensure that these important structures continue to be a valuable part of our communities for years to come.