Commercial surveying news from the Beattie Partnership

How Can Heritage Impact on School Business Rates?

Work is well underway for the 2017 rating revaluation, and there are a number of key issues that the education sector should consider when it comes to listed school buildings.

Problems That Come With Heritage

Independent schools are competing for pupils and status is a big part of this. Having listed buildings can be a real asset, but heritage comes with responsibilities, and restrictions. Should the financial implications of having listed buildings be reflected in a school’s rates assessment?

Schools with listed buildings face unique challenges, both in terms of upkeep and ensuring they are fit for the changing demands of teaching.

Gail Stoten, Heritage Director at Pegasus Planning, points out that owners have a duty to maintain listed buildings. If they don’t, the local planning authority can serve them with an enforcement notice. At the same time, making alterations or improvements may be constrained by the building’s listed status.

This can all amount to additional expenses for the upkeep of listed buildings; with costs arising from planning permission, listed building consent and consequent assessment reports.

What About the Rates?

It has been an established practice for rating agents to seek to take a property out of rating if it is undergoing refurbishment. However, a recent court case involving the Valuation Office, Newbigin (VO) v Monk, has led to a questioning of this approach and cast doubt on its future application.

The issues revolve around what can be classed as reasonable repairs and whether or not they are economical.

If an entire site undergoing refurbishment is listed then it would be a simple exercise, because vacant listed properties are exempt from rates. But if the building forms part of a bigger, non-listed site, then exemption will not be granted automatically.

The Valuation Office’s own updated practice guidelines indicate that if a property is deemed to be undergoing reasonable repairs that can be viewed as economic to undertake, then it is not liable to a rating reduction for the duration of the works.

However, when it comes to schools with listed buildings, there are issues of high costs arising from upkeep and refurbishment.

Listed buildings can incur higher costs than the norm, so the question then is whether these sort of increases might be seen as uneconomic.

The fact is that some schools will not have any choice but to undergo maintenance work if they have listed buildings. Should this be reflected in the rateable values coming from the Valuation Office’s forthcoming Business Rates Revaluation?

The bottom line for schools is to accurately reflect these kinds of issues within the negotiations for the 2017 revaluation. This is where professional advice offered by rating experts, like The Beattie Partnership, can prove invaluable.

If you would to discuss how any of the issues raised may affect your school, please contact us

Our Partner, Paul Giness, has conducted an interview with Property Aspects Magazine, about the impact of heritage on school’s business rates, which you can read here.