How Will Empty Property Rates Affect your Business?
After a short holiday of six months, when no rates were paid on empty industrial buildings and three months for offices, owners or former occupiers are now liable for full rates payment, irrespective of their efforts to lease the buildings.
Liberal Parties were opposed to this tax, but since coming into power they have yet to do anything about it, except for a marginal increase in the threshold of those small properties which are exempt from paying business rates. This may in some part be due to the higher than anticipated revenue raised by the initiative and the Governments’ requirement for income to finance public expenditure.
Empty rates on commercial buildings are effectively a tax on the landlord’s or owner’s failure to attract an occupier. In the current climate the continuing lack of finance and a shortage of business tenants have stalled speculative development, with many developers being further discouraged by the potential burden of empty rates payments whilst the property is being marketed to let.
Whilst the Government is under pressure to raise tax revenues from all sources, empty business rates penalise investment and development and substantially reduces the ability of SMEs to not only survive these difficult times, but also to plan further expansion. The Government has the opportunity to put measures in place to aid the recovery by the abolition of this penal tax.
So, can anything be done in the meantime? If you are the owner of an empty building it may be possible to reduce the rates burden by appealing the assessment, if:
1. The area has undergone a material change due to physical changes such as the development of a competing industrial estate or office park or shopping centre.
2. The property is in poor condition and beyond economic repair to put it into a tenantable state.
3. There are a large number of vacant units available in the area.
4. The property has been bypassed by a new road.
5. There are road works affecting access to the property. This is particularly relevant for retail properties in town centre streets which are undergoing improvement work and the display frontage has been obscured.
For further information on empty tax rates or to seek guidance and advice on how you can minimise the impact on your business, call Phil at Petty Chartered Surveyors on 01282 456677
or email firstname.lastname@example.org