Last edited 08 Aug 2017

Local property tax

In England and Wales, the term ‘local property tax’ (LPT) refers to either the council tax or business rates. Very broadly, domestic properties pay the council tax, whilst business properties pay business rates (sometimes referred to as non-domestic rates).

Where properties are partly for business use and partly for domestic use, such as a pub or shop, where the owner lives on the premises or in a flat above the business, it may be necessary to pay both taxes.

If an owner is using their home for minor business purposes, they are not normally expected to pay business rates, for example, if:

  • They only use a small part of the home for business.
  • They don’t use it to sell goods or services to visiting clients or members of the public.
  • They don’t employ other people to work at the premises.
  • They don’t make alterations that are not for domestic purposes.

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