VAT levy won’t dampen buyers’ desire for listed buildings
ONE of the few actual surprises in the Chancellor of the Exchequer’s budget statement in March was the proposed introduction from October 1 this year of the full 20 per cent VAT levy on alterations on listed buildings – be they residential or institutional.
While repairs on listed properties have not been exempt from VAT, the proposed introduction of VAT on alterations for the first time – which, in practice, generally mean accommodating for modern, comfortable use – is being opposed by heritage specialists who see continued use and function of these buildings as vital to ensuring their conservation.
The definition of a listed property is a building of special architectural of historic interest and all kinds of buildings – commercial or residential – are listed to protect and preserve the country’s heritage.
The argument has yet to be played out with Her Majesty’s Revenue and Customs (HMRC) but, in our experience as agents selling or having sold some of best of the country’s 500,000 listed properties, owners take enormous pride in looking after their homes and are mindful of their stewardship of the house and its place in the country’s heritage.
In an area of the country such as ours, with the cathedral cities of York and Ripon, the spa town of Harrogate and historic market towns of Ilkley, Wetherby and Knaresborough, as well as a supporting cast of villages and hamlets which have seen settlements for hundreds of years, it is unusual if we’re not under instruction at any one time to sell several properties with listed designation.
Listing marks and celebrates a building’s special architectural and historic interest, and also brings it under the consideration of the planning system so that some thought will be taken about its future.
Buildings around today that pre-qualify for listing include all pre-19th Century buildings in anything like their original conditions, most structures from 1700 to 1840, buildings of quality and character from 1840 and the very highest quality and best examples of post-1914 buildings.
Different grades of listing indicate different things about each property. Grade II status is awarded to buildings of special interest which warrant every effort being made to preserve them. Grade II* indicates a particularly important building of more than special interest and just 4 per cent of listed buildings in England and Wales fall in to this category.
The older a building is, the more likely it is to be listed. In England there are approximately 374,081 listed building entries, with 92 per cent in the Grade II class.
All buildings built before 1700 which survive in anything like their original condition are listed, as are most of those built between 1700 and 1840. The criteria become tighter with time, so that post-1945 buildings have to be exceptionally important to be listed. A building has normally to be over 30 years old to be eligible for listing.
Being designated as listed protects the interior and exterior of the properties. In addition, objects or structures fixed to the building and those within the curtilage of the building which were present before July 1948 benefit from the listed status too. The property downturn of recent years has been seeing the disposal of some listed property by some institutional owners, which will be in need extensive modernisation for contemporary residential use, and agents will always be up-front about this in any particulars or brochures.
But it’s very rare nowadays for a privately-owned residential property with listed status to come forward for mainstream market sale which hasn’t been extensively modernised inside and the exterior maintained down the years in accordance with the required standards and appropriate permissions.