From 2023, there will be two key changes that commercial property owners must be aware of; these are the following:
Tax On Dwellings Held By Companies
When a residential property is worth over £500,000 but is held by a company and is not commercially let out or used for other qualifying purposes, an annual tax on enveloped dwellings (ATED) is applied. Currently, this tax begins at £3,800 per year; however, from April 2023, the starting rate will increase to £4,150.
It is important to keep in mind that the ATED charge for 2023-2024 to 2027-2028 must be based on the open market value of the property as of the 1st of April 2022. If you are the property owner, you will be responsible for providing this valuation.
Properties Subject To Business Rates
Any properties subject to business rates are due to be revalued in 2023. Suppose the value has dropped compared to the last valuation point in 2017. In that case, rates will be reduced from April 2023. Should the rateable value rise, the rates bill will increase but will be capped at 5% for small properties, 10% for medium-sized and 15% for large.