Commercial to Residential: When Does Council Tax Start?
Discussion
Grade 2 Listed A2 ground floor shop with upper floor owned since 1994.
Over the years, planning permission has been applied, granted, lapsed and reapplied for and granted etc for the upper floor to be converted from commercial to residential use with the most recent permission, I believe, having lapsed.
Also, throughout this period, no conversion/building works have actually taken place - at most, there have been site visits from the council as well as contractors with associated correspondence on council requirements for the works and quotes from the contractors for the conversion work.
As such, at what point should the council reclassify the upper floor as residential and, hence, charge council tax as opposed to business rates?
The upper floor has been empty for several years and, as the council has at some point re-classified it as residential this has been generating a council tax liability with an empty homes premium which is still on going.
I've inherited the property and am wading through (this clustefk) the paperwork but am of the initial belief the upper floor should still be classified as commercial and hence, there should be no on going council tax liability and potentially, a refund due of previous payments.
Also, as the building is Grade 2 listed there should be no backdated business rates due for this period as well as for any future void period whilst the upper floors are brought back into service.
Would really welcome thoughts/opinions on this scenario and the best way to approach it with the council.
Over the years, planning permission has been applied, granted, lapsed and reapplied for and granted etc for the upper floor to be converted from commercial to residential use with the most recent permission, I believe, having lapsed.
Also, throughout this period, no conversion/building works have actually taken place - at most, there have been site visits from the council as well as contractors with associated correspondence on council requirements for the works and quotes from the contractors for the conversion work.
As such, at what point should the council reclassify the upper floor as residential and, hence, charge council tax as opposed to business rates?
The upper floor has been empty for several years and, as the council has at some point re-classified it as residential this has been generating a council tax liability with an empty homes premium which is still on going.
I've inherited the property and am wading through (this clustefk) the paperwork but am of the initial belief the upper floor should still be classified as commercial and hence, there should be no on going council tax liability and potentially, a refund due of previous payments.
Also, as the building is Grade 2 listed there should be no backdated business rates due for this period as well as for any future void period whilst the upper floors are brought back into service.
Would really welcome thoughts/opinions on this scenario and the best way to approach it with the council.
The Council are just the billing authority - they generate the bills and collect the money.
Properties are actually classified and valued by the Valuation Office Agency (VOA) which is a central Government department. Any appeal around the rating/banding of the property would be made to the VOA.
In the first instance I'd call the Council Tax department at the Council to query the bill and have a chat with them to try and establish when and why the property changed from non-domestic to residential. Generally they'll be as helpful as they can be - it's no skin off their nose if it's wrong and you get a refund. They may not have much detail and may ultimately tell you to speak to the VOA, but they will have had a form from the VOA and there may be notes or documents on their system that provide some insight.
The VOA do check planning applications - before all this stuff was online staff from the VOA would regularly visit the Planning Department to look at files and would do their valuation from the plans. It's unusual but possible they processed the change off the back of a permitted application that was never properly commenced.
The property should not be liable for Council Tax until the works are complete and the property is ready for occupation. if you have evidence that it has never been converted as per the plans you should be able to get this sorted relatively easily.
Properties are actually classified and valued by the Valuation Office Agency (VOA) which is a central Government department. Any appeal around the rating/banding of the property would be made to the VOA.
In the first instance I'd call the Council Tax department at the Council to query the bill and have a chat with them to try and establish when and why the property changed from non-domestic to residential. Generally they'll be as helpful as they can be - it's no skin off their nose if it's wrong and you get a refund. They may not have much detail and may ultimately tell you to speak to the VOA, but they will have had a form from the VOA and there may be notes or documents on their system that provide some insight.
The VOA do check planning applications - before all this stuff was online staff from the VOA would regularly visit the Planning Department to look at files and would do their valuation from the plans. It's unusual but possible they processed the change off the back of a permitted application that was never properly commenced.
The property should not be liable for Council Tax until the works are complete and the property is ready for occupation. if you have evidence that it has never been converted as per the plans you should be able to get this sorted relatively easily.
quinny100 said:
The Council are just the billing authority - they generate the bills and collect the money.
Properties are actually classified and valued by the Valuation Office Agency (VOA) which is a central Government department. Any appeal around the rating/banding of the property would be made to the VOA.
In the first instance I'd call the Council Tax department at the Council to query the bill and have a chat with them to try and establish when and why the property changed from non-domestic to residential. Generally they'll be as helpful as they can be - it's no skin off their nose if it's wrong and you get a refund. They may not have much detail and may ultimately tell you to speak to the VOA, but they will have had a form from the VOA and there may be notes or documents on their system that provide some insight.
The VOA do check planning applications - before all this stuff was online staff from the VOA would regularly visit the Planning Department to look at files and would do their valuation from the plans. It's unusual but possible they processed the change off the back of a permitted application that was never properly commenced.
The property should not be liable for Council Tax until the works are complete and the property is ready for occupation. if you have evidence that it has never been converted as per the plans you should be able to get this sorted relatively easily.
It actually very much is skin off their nose as council tax is direct to them, wheras a good majority of business rates goes back to central government. They receive funding from UBR by a central government grant. I have known a local authority when dealing with a similar issue worth £200k of council tax revenue / refunds put up real barriers.Properties are actually classified and valued by the Valuation Office Agency (VOA) which is a central Government department. Any appeal around the rating/banding of the property would be made to the VOA.
In the first instance I'd call the Council Tax department at the Council to query the bill and have a chat with them to try and establish when and why the property changed from non-domestic to residential. Generally they'll be as helpful as they can be - it's no skin off their nose if it's wrong and you get a refund. They may not have much detail and may ultimately tell you to speak to the VOA, but they will have had a form from the VOA and there may be notes or documents on their system that provide some insight.
The VOA do check planning applications - before all this stuff was online staff from the VOA would regularly visit the Planning Department to look at files and would do their valuation from the plans. It's unusual but possible they processed the change off the back of a permitted application that was never properly commenced.
The property should not be liable for Council Tax until the works are complete and the property is ready for occupation. if you have evidence that it has never been converted as per the plans you should be able to get this sorted relatively easily.
PM me the address and I will have a look to see why it changed from business rates to council tax. But I suspect it will have followed a report from the Council to the Valuation Office that the use had changed.
Broadly you will need to contact the VOA by issuing a Check stating that the property is still non-domestic, probably including a plan and photos to show no bathroom, kitchen etc. If the VO doesnt agree it on a Check you will need to serve a Challenge setting out your full argument, and then if necessary appeal.
Broadly you will need to contact the VOA by issuing a Check stating that the property is still non-domestic, probably including a plan and photos to show no bathroom, kitchen etc. If the VO doesnt agree it on a Check you will need to serve a Challenge setting out your full argument, and then if necessary appeal.
i converted a Grade2 office to resi use.
after the works were finished, I applied to the voa to reclassify, and this triggered the change to council tax.
on other conversions, the council has initiated the change after a site visit - their criteria seemingly being that the properties were habitable (all utilities, kitchens + bathrooms finished etc).
i think your assessment seems reasonable
after the works were finished, I applied to the voa to reclassify, and this triggered the change to council tax.
on other conversions, the council has initiated the change after a site visit - their criteria seemingly being that the properties were habitable (all utilities, kitchens + bathrooms finished etc).
i think your assessment seems reasonable
It appears that the solid ground that I thought I was on is now looking somewhat shaky!
After some fruitless email correspondence with the council tax department, the matter was referred to someone more capable and helpful.
He visited the property today and has subsequently come back with information that I was not aware of - apparently, when my late father initially sought to convert the upper floor from office to residential in 2010, he emailed the council to request it be re-classed accordingly which the council duly actioned.
The strange thing is, this was done before any works started - this was either an error on my fathers part as he perhaps didn't fully appreciate the impact of this or perhaps, back then, Grade 2 listed buildings were not exempt from business rates so to avoid paying these for the vacant upper floor, he proceeded to have it re-classed as residential as, perhaps, empty residential properties were still not liable for council tax.
So, I guess my questions are:
1) Shouldn't the council insist on more than instructions from a property owner regarding re-classification such as proof of conversion works, site visits, council sign off etc before re-classifying a property particularly as this is a listed building? Linked to this is whether any refund would be due of historic council tax paid since re-classification.
2) If I do go down the route of re-classifying the upper floor from residential back to office, would I then be able to apply for business rates exemption based on the building being listed and the upper floor being vacant? Would this still be the case bearing in mind that the ground floor is currently let?
Genuinely wasn't expecting this curve ball as my father didn't really use email and there is no printed copy of this correspondence in his file.
After some fruitless email correspondence with the council tax department, the matter was referred to someone more capable and helpful.
He visited the property today and has subsequently come back with information that I was not aware of - apparently, when my late father initially sought to convert the upper floor from office to residential in 2010, he emailed the council to request it be re-classed accordingly which the council duly actioned.
The strange thing is, this was done before any works started - this was either an error on my fathers part as he perhaps didn't fully appreciate the impact of this or perhaps, back then, Grade 2 listed buildings were not exempt from business rates so to avoid paying these for the vacant upper floor, he proceeded to have it re-classed as residential as, perhaps, empty residential properties were still not liable for council tax.
So, I guess my questions are:
1) Shouldn't the council insist on more than instructions from a property owner regarding re-classification such as proof of conversion works, site visits, council sign off etc before re-classifying a property particularly as this is a listed building? Linked to this is whether any refund would be due of historic council tax paid since re-classification.
2) If I do go down the route of re-classifying the upper floor from residential back to office, would I then be able to apply for business rates exemption based on the building being listed and the upper floor being vacant? Would this still be the case bearing in mind that the ground floor is currently let?
Genuinely wasn't expecting this curve ball as my father didn't really use email and there is no printed copy of this correspondence in his file.
Is there a seperate entrance to the upper parts?
Assuming so I would be minded to try and turn back to commercial use and then empty rate. There may way well be limits to how far you can go back to do this. Chris will be more up to date than me as they meddle far too frequently for my historic knowledge to be useful.
In terms of changing then ideally they might check it, but they might also rely on the proposal and files.
Assuming so I would be minded to try and turn back to commercial use and then empty rate. There may way well be limits to how far you can go back to do this. Chris will be more up to date than me as they meddle far too frequently for my historic knowledge to be useful.
In terms of changing then ideally they might check it, but they might also rely on the proposal and files.
surveyor said:
Is there a seperate entrance to the upper parts?
Assuming so I would be minded to try and turn back to commercial use and then empty rate. There may way well be limits to how far you can go back to do this. Chris will be more up to date than me as they meddle far too frequently for my historic knowledge to be useful.
In terms of changing then ideally they might check it, but they might also rely on the proposal and files.
Appreciate the reply.Assuming so I would be minded to try and turn back to commercial use and then empty rate. There may way well be limits to how far you can go back to do this. Chris will be more up to date than me as they meddle far too frequently for my historic knowledge to be useful.
In terms of changing then ideally they might check it, but they might also rely on the proposal and files.
I'm wondering whether this would work as the ground floor is currently let.
Hopefully, Chris can weigh in with his knowledge - would also allow me to apologise for missing his reply from 16 August and his kind offer of help.
surveyor said:
I'm sure that Chris will see this and comment.
But a reply on whether there is a seperate entrance would be useful.
I'm sorry, meant to say yes and upload the below photo but got distracted. But a reply on whether there is a seperate entrance would be useful.
Rear access via door on the right. Door on the left leads to the ground floor shop.
surveyor said:
last use was commercial? Although it had PP for resi any changes like kitchens bathrooms installed?
Yes. The whole property was let to an estate agent who did a runner with tenants deposits just before the residential tenants deposit scheme came into being c2008. The property failed to let for a few years until c2010 when the current tenant took it on, but only the ground floor.I suspect this prompted my father to then look at turning upstairs into residential. PP was applied for, granted and then lapsed - I believe this happened twice which brings us to the present day.
However, upstairs has been un-touched since the previous tenant did a runner - pictures below show the remnants of his stuff - we cleared everything else out.
Even though PP was granted, no actual works took place.
Edited by SpeedBash on Friday 25th September 22:24
Apologies missed this all yesterday.
During my time in the VOA it used to irritate me intensely when the staff making list alterations didnt go and have a look at the property. Some of them always did others rarely did. One of those that did had been asked to go to a corner shop that was now residential. Off he went and indeed in what used to be the shop was sofa armchairs TV etc, however he noticed the Open/Closed sign was still on the door. He returned at the weekend and it was back to a shop again!
The VO rarely inspects these days.
Anyway back to the OPs position. The VO gets information from a number of sources but most of it comes from the local authority and there is every chance the VO just actioned the report by the Council. Its likely that had the request been to change it from Council Tax to non-domestic rates then it would have come under more scrutiny because as a grade 2 empty non-domestic building it would be exempt from business rates, council tax is payable on empty listed buildings.
You will need to write to the VO appealing the banding on the grounds it should never have been banded. If they agree it will be interesting as it can only be entered in the Non-Domestic List from 1 April 2017.
During my time in the VOA it used to irritate me intensely when the staff making list alterations didnt go and have a look at the property. Some of them always did others rarely did. One of those that did had been asked to go to a corner shop that was now residential. Off he went and indeed in what used to be the shop was sofa armchairs TV etc, however he noticed the Open/Closed sign was still on the door. He returned at the weekend and it was back to a shop again!
The VO rarely inspects these days.
Anyway back to the OPs position. The VO gets information from a number of sources but most of it comes from the local authority and there is every chance the VO just actioned the report by the Council. Its likely that had the request been to change it from Council Tax to non-domestic rates then it would have come under more scrutiny because as a grade 2 empty non-domestic building it would be exempt from business rates, council tax is payable on empty listed buildings.
You will need to write to the VO appealing the banding on the grounds it should never have been banded. If they agree it will be interesting as it can only be entered in the Non-Domestic List from 1 April 2017.
SpeedBash said:
surveyor said:
last use was commercial? Although it had PP for resi any changes like kitchens bathrooms installed?
Yes. The whole property was let to an estate agent who did a runner with tenants deposits just before the residential tenants deposit scheme came into being c2008. The property failed to let for a few years until c2010 when the current tenant took it on, but only the ground floor.I suspect this prompted my father to then look at turning upstairs into residential. PP was applied for, granted and then lapsed - I believe this happened twice which brings us to the present day.
However, upstairs has been un-touched since the previous tenant did a runner - pictures below show the remnants of his stuff - we cleared everything else out.
Even though PP was granted, no actual works took place.
Edited by SpeedBash on Friday 25th September 22:24
If your place has a bathroom or shower AND kitchen facilities I think you'll struggle to get the banding deleted. But I have been successful in having historic bandings deleted, along with the associated council tax bills, where one or both of those things is missing.
Louis Balfour said:
Having argued with VOA and the local authority quite often, I would take the view that a property is taxable based upon its potential for beneficial occupation.
If your place has a bathroom or shower AND kitchen facilities I think you'll struggle to get the banding deleted. But I have been successful in having historic bandings deleted, along with the associated council tax bills, where one or both of those things is missing.
Thats broadly correct with the proviso that if t is not fit for beneficial occupation there can be questions as to why and whether putting it back in to a position that beneficial occupation is economic to do. So carrying constructive vandalism to get out of paying may not work.If your place has a bathroom or shower AND kitchen facilities I think you'll struggle to get the banding deleted. But I have been successful in having historic bandings deleted, along with the associated council tax bills, where one or both of those things is missing.
SpeedBash said:
Grade 2 Listed A2 ground floor shop with upper floor owned since 1994.
Also, as the building is Grade 2 listed there should be no backdated business rates due for this period as well as for any future void period whilst the upper floors are brought back into service.
1. there shouldn't be any empty rates on a G2 listed property should there?Also, as the building is Grade 2 listed there should be no backdated business rates due for this period as well as for any future void period whilst the upper floors are brought back into service.
2. get a surveyor involved, will save yo a fortune in the long run
Insurancejon said:
SpeedBash said:
Grade 2 Listed A2 ground floor shop with upper floor owned since 1994.
Also, as the building is Grade 2 listed there should be no backdated business rates due for this period as well as for any future void period whilst the upper floors are brought back into service.
1. there shouldn't be any empty rates on a G2 listed property should there?Also, as the building is Grade 2 listed there should be no backdated business rates due for this period as well as for any future void period whilst the upper floors are brought back into service.
2. get a surveyor involved, will save yo a fortune in the long run
Louis Balfour said:
Having argued with VOA and the local authority quite often, I would take the view that a property is taxable based upon its potential for beneficial occupation.
If your place has a bathroom or shower AND kitchen facilities I think you'll struggle to get the banding deleted. But I have been successful in having historic bandings deleted, along with the associated council tax bills, where one or both of those things is missing.
This seems to make sense, and I believe the test in court was whether it was "immediately occupiable" which it would appear from the pictures that it isn't?If your place has a bathroom or shower AND kitchen facilities I think you'll struggle to get the banding deleted. But I have been successful in having historic bandings deleted, along with the associated council tax bills, where one or both of those things is missing.
Update: The VOA have indicated, as requested, they are prepared to re-classify the upper part as non-domestic but only from the 1 April 2017 list.
This will make the space liable for business rates but, as the building is Grade II listed, I should be granted an exemption.
Thereafter, the two outstanding questions are:
1) Am I entitled to a refund of the council tax paid from 1 April 2017 to present day?
The local council re-classified the upper part from non-domestic to domestic upon instruction from my father c.2010 but surely the VOA's agreement to re-classify back to non-domestic from the 2017 list means the local council are now obliged to issue a refund of council tax paid for this period.
2) What are the chances of success in challenging the VOA to re-classify the upper parts as non-domestic further back to when my father originally requested the change from non-domestic to domestic c.2010 citing the fact that no conversion works ever took place? I would imagine the VOA's stance would be they were simply acting upon instructions from the property owner at the time. Advice I have received from a commercial agent and the helpful chap at the council who is dealing with this query suggested it's unlikely that I would be successful.
This will make the space liable for business rates but, as the building is Grade II listed, I should be granted an exemption.
Thereafter, the two outstanding questions are:
1) Am I entitled to a refund of the council tax paid from 1 April 2017 to present day?
The local council re-classified the upper part from non-domestic to domestic upon instruction from my father c.2010 but surely the VOA's agreement to re-classify back to non-domestic from the 2017 list means the local council are now obliged to issue a refund of council tax paid for this period.
2) What are the chances of success in challenging the VOA to re-classify the upper parts as non-domestic further back to when my father originally requested the change from non-domestic to domestic c.2010 citing the fact that no conversion works ever took place? I would imagine the VOA's stance would be they were simply acting upon instructions from the property owner at the time. Advice I have received from a commercial agent and the helpful chap at the council who is dealing with this query suggested it's unlikely that I would be successful.
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