Listed buildings are an important part of our architectural heritage, with many dating back hundreds of years. These buildings are considered to be of special historic or architectural interest, and as such, they are protected from demolition or significant alteration. However, owning a listed building comes with its own set of challenges, one of which is the payment of business rates.
Business rates are a tax that all non-domestic properties in the UK must pay. This tax is based on the rateable value of the property, which is determined by the Valuation Office Agency. The rateable value of a property is calculated based on its rental value, and it is used to determine how much business rates a property owner must pay each year.
Listed buildings are no exception when it comes to paying business rates. However, the way in which business rates are calculated for listed buildings differs slightly from other non-listed properties. The government provides relief on business rates for some listed buildings to help alleviate the financial burden on the owners of these historic properties.
One of the main ways in which business rates on listed buildings are different from other properties is through the use of the listed building relief scheme. This scheme provides relief on business rates for certain listed buildings, which are used for nonprofit purposes. This can include buildings used for religious worship, public museums, art galleries, and community halls.
To qualify for listed building relief, the property must be listed on the National Heritage List for England, the Scottish Buildings at Risk Register, the Cadw Welsh Historic Environment Record, or the Northern Ireland Environment Agency: Schedule of Historic Monuments. Additionally, the property must be used for nonprofit purposes, and it must be open to the public at least 28 days a year.
Listed building relief varies depending on the location of the property. In England, Wales, and Northern Ireland, listed buildings used for nonprofit purposes are eligible for 80% relief on their business rates. In Scotland, listed buildings used for nonprofit purposes are eligible for 100% relief on their business rates.
While listed building relief can provide significant financial savings for the owners of these properties, it is important to note that not all listed buildings are eligible for relief. Some listed buildings are used for commercial purposes, such as restaurants or shops, and they do not qualify for relief under the scheme.
For owners of listed buildings that do not qualify for relief, the business rates can be a significant cost to consider. Maintaining a listed building can be expensive, as repairs and renovations must be carried out in accordance with strict conservation guidelines. In addition to the cost of maintenance, owners of listed buildings must also pay insurance, utilities, and other ongoing costs associated with the property.
One way in which owners of listed buildings can reduce their business rates is to appeal their rateable value. The rateable value of a property is determined by the Valuation Office Agency, and it is based on the rental value of the property. If an owner believes that the rateable value of their property is too high, they can appeal to have it reassessed.
Appealing a rateable value can be a complex process, and it is recommended that property owners seek professional advice from a surveyor or valuer. If the appeal is successful, the rateable value of the property will be lowered, and the owner will pay less in business rates each year.
In conclusion, business rates on listed buildings can be a significant cost for property owners to consider. While some buildings are eligible for relief under the listed building relief scheme, others must pay the full amount of business rates each year. Owners of listed buildings should carefully consider their options and seek professional advice to ensure that they are paying the correct amount of business rates for their property.