Understanding The Impact Of Business Rates On Empty Listed Buildings

business rates on empty listed buildings can be a significant financial burden for property owners and investors. These rates are charged by local authorities on non-domestic properties, including commercial buildings, shops, and offices. Empty listed buildings, which are often considered to be of historical or architectural significance, are not exempt from these rates, contrary to popular belief.

Listed buildings are properties that are deemed to have special architectural or historic interest, as designated by Historic England in England, Historic Environment Scotland in Scotland, Cadw in Wales, and the Northern Ireland Environment Agency in Northern Ireland. These properties are protected by law, meaning that any alterations or changes to the building must receive special permission. This can often make it difficult for owners to find suitable tenants for their listed buildings, leading to extended periods of vacancy.

In addition to facing the challenges of finding tenants for their properties, owners of empty listed buildings must also contend with paying business rates on these vacant spaces. Business rates are a tax based on the rateable value of a property, which is determined by the rental value of the property as of a specific date. The amount of business rates owed is calculated based on this rateable value and can vary depending on the location and condition of the property.

For owners of empty listed buildings, the business rates can be particularly onerous. Not only do they have to cover the costs of maintaining and preserving the historic fabric of the building, but they also have to pay business rates on a property that is not generating any income. This can create a financial strain on property owners and investors, especially if the property remains empty for an extended period of time.

One of the reasons why business rates are charged on empty listed buildings is to discourage property owners from leaving their buildings empty and unused. By imposing business rates on these properties, local authorities hope to incentivize owners to find suitable tenants or alternative uses for their listed buildings. This is in line with the government’s broader strategy to revitalize town centers and support local economies by encouraging the productive use of commercial properties.

However, critics argue that business rates on empty listed buildings can hinder the conservation and preservation of historic buildings. Owners of listed buildings often face high maintenance and repair costs, which can make it financially unfeasible to bring the property up to modern standards and attract tenants. By imposing business rates on these vacant buildings, local authorities may inadvertently exacerbate the financial challenges faced by property owners, leading to neglect and deterioration of these important heritage assets.

There have been calls for reform of the business rates system to provide relief for owners of empty listed buildings. Some have suggested that empty listed buildings should be exempt from business rates altogether, given the unique challenges faced by owners in maintaining and finding suitable uses for these properties. Others have proposed a sliding scale of business rates based on the length of time a building has been empty, with the rates gradually increasing to incentivize owners to find a productive use for their buildings.

In recent years, there have been some efforts to provide relief for owners of empty listed buildings. For example, the government introduced a temporary measure in 2017 that exempted newly completed commercial properties from paying business rates for the first three months after completion. While this measure was not specifically targeted at empty listed buildings, it did provide some relief for property owners facing financial challenges in bringing new properties to market.

Overall, the issue of business rates on empty listed buildings is a complex and contentious one. While local authorities have a legitimate interest in incentivizing owners to bring their properties back into use, the financial burden imposed on owners of empty listed buildings can sometimes hinder rather than support the conservation and preservation of these important heritage assets. Moving forward, it will be important for policymakers to strike a balance between encouraging the productive use of commercial properties and ensuring the long-term preservation of our historic built environment.