Listed buildings are a key part of the UK’s architectural heritage, with over 400,000 buildings currently protected and preserved for future generations. While listing helps to safeguard these historic structures, it also brings with it a range of responsibilities for owners, including dealing with business rates.
Business rates are a tax that all commercial properties in the UK must pay. They are calculated based on the rateable value of the property, which is determined by the Valuation Office Agency. However, when it comes to listed buildings, there are some unique considerations that owners need to be aware of.
One of the key differences for owners of listed buildings is that the rateable value of the property may not accurately reflect its market value. Listed buildings are often subject to restrictions on alterations and changes to the property, which can impact its commercial viability. This means that while the rateable value may be high, the actual rental income that can be generated from the property is limited.
In recognition of this, the government offers relief on business rates for some listed buildings. Owners of listed buildings that are used for certain purposes, such as for charities or as community buildings, may be eligible for relief on their business rates. This can help to alleviate some of the financial burden that comes with owning and maintaining a listed building.
However, not all listed buildings qualify for relief on business rates. Owners of Grade I and Grade II* listed buildings, which are considered to be of exceptional architectural or historic interest, are not eligible for relief on their business rates. This can be a significant financial challenge for owners of these prestigious properties, especially if they are struggling to generate rental income due to the restrictions placed on alterations and changes.
In recent years, there have been calls for reform of the business rates system for listed buildings. Campaigners argue that the current system is unfair and places an undue financial burden on owners of listed buildings, particularly those that are Grade I or Grade II* listed. They argue that the restrictions placed on alterations and changes to listed buildings can make them less commercially viable, and that owners should not be penalized for preserving our historic heritage.
There have been some positive steps towards reforming the business rates system for listed buildings. The government introduced a new relief scheme in 2017 that provides relief on business rates for owners of buildings that have been brought back into use after standing empty for a certain period of time. This is aimed at encouraging owners to invest in and bring back into use empty listed buildings, helping to preserve our historic heritage while also stimulating economic growth.
Despite these positive steps, there is still more to be done to reform the business rates system for listed buildings. Campaigners are calling for a more flexible approach to assessing the rateable value of listed buildings, taking into account their unique characteristics and restrictions. They argue that this would help to ensure that owners are not unfairly penalized for preserving our historic heritage, while also encouraging investment in and maintenance of these important buildings.
In conclusion, business rates on listed buildings are a complex issue that requires careful consideration. While there have been some positive steps towards reforming the system, there is still more to be done to ensure that owners of listed buildings are not unfairly penalized for preserving our historic heritage. By taking a more flexible approach to assessing the rateable value of listed buildings and providing relief where necessary, we can help to support the preservation of our architectural heritage while also encouraging economic growth.