Listed buildings hold historical significance and are often considered to be important architectural landmarks. However, owning and maintaining a listed building comes with its own set of challenges, one of which is dealing with business rates. Business rates are taxes that are levied on non-domestic properties, including commercial buildings, and this includes listed buildings as well. In this article, we will explore the impact of business rates on listed buildings and discuss strategies that owners can use to mitigate their costs.
Listed buildings are classified into three categories – Grade I, Grade II*, and Grade II. Grade I buildings are considered to be of exceptional interest, Grade II* buildings are particularly important buildings of more than special interest, and Grade II buildings are buildings of special interest. These classifications are given by Historic England and are used to determine the level of protection and significance of the building.
Business rates are calculated based on the rateable value of a property, which is set by the Valuation Office Agency (VOA). The rateable value is an estimate of the open market rental value of a property as of a specific date. For listed buildings, the rateable value is calculated taking into consideration the special architectural or historic interest of the building. This means that listed buildings often have a higher rateable value compared to non-listed buildings of similar size and location.
The higher rateable value of listed buildings can result in owners having to pay more in business rates. This can be a significant financial burden, especially for owners of Grade I and Grade II* listed buildings, which are considered to be of exceptional interest. In some cases, owners may struggle to afford the business rates on their listed buildings, leading to financial difficulties and potentially even the neglect of the building.
In order to mitigate the impact of business rates on listed buildings, owners can explore various strategies. One common strategy is to apply for listed building consent to carry out alterations that can reduce the rateable value of the property. For example, owners can convert unused spaces within the building into separate units or introduce energy efficiency measures to improve the rating of the building. By making these changes, owners can potentially lower the rateable value of the property and reduce their business rates liability.
Another strategy that owners can consider is applying for business rates relief. There are various relief schemes available to owners of listed buildings, including the Listed Building Heritage Partnership Agreements and the Listed Building Maintenance Grants. These schemes provide financial assistance to owners for the repair and maintenance of their listed buildings, which can help offset the costs of business rates.
Owners of listed buildings can also explore the option of applying for business rates exemptions. Some listed buildings may be exempt from business rates under certain conditions, such as if they are used for charitable purposes or if they are vacant. Owners should consult with their local council to determine if their listed building is eligible for any exemptions.
Overall, business rates on listed buildings can be a significant financial burden for owners, especially for Grade I and Grade II* listed buildings. However, there are strategies that owners can use to mitigate the impact of business rates, such as applying for listed building consent, exploring business rates relief schemes, and applying for exemptions. By taking proactive measures to reduce their business rates liability, owners can ensure the preservation and maintenance of their listed buildings for future generations to appreciate and enjoy.