 Empty Property Rates Relief Cut – Return to Bombsite Britain? Posted by DMH Stallard on 28th June 2011.
The changes will have a widespread impact on both landlords and tenants, whether you or your clients are:
Currently the relief provides that owners of unlet commercial property with a rating value of under £18,000 pay no business rates on their empty property. The Government has estimated that it would cost £400m to continue the scheme, and as part of its wider spending review believes that cost can no longer be justified.
The proposed changes have been strongly criticised by the British Property Federation (“BPF”) who have declared it will bring about a return to ‘bombsite Britain’ as owners of empty property chose to demolish their holdings rather than pay full business rates
In a statement BPF Chief Executive Liz Peace said: “The majority of the properties affected by today’s announcement will be in areas that are already economically disadvantaged, and so this will be a further blow.” The BPF is lobbying the government with representatives from the British Retail Consortium, CBI, RICS, British Chambers of Commerce and others and has set up a website www.emptyrates.com as a focal point for its efforts.
Clearly this change will be a matter of concern for commercial property owners who have struggled to let their buildings as a result of the downturn. Calculations will have to be made to ascertain the likely cost to property owners and innovative solutions considered to let those properties which will now be caught by the tax.
If they want to let those properties which are currently empty, Landlords could consider:-
Landlords could also look at planning issues to make their properties more lettable. This can be done by addressing town planning constraints such as the need for change of use planning permission i.e. storage and distribution to light industrial use, or removing restrictive planning conditions that might restrict hours of working, traffic movements or other operational requirements. Applying for more ‘open’ planning consents on sites and buildings that could be attractive to a greater range of businesses and users can help to turn round empty properties more quickly.
The proposed changes will also have an impact on small businesses as the government does not intend to re-introduce a 50 per cent relief, and small firms will not be able to claim Small Business Rate Relief on the property. The Federation of Small Businesses (“FSB”) has stated that it had written to local government minister, Bob Neill, to protest that the changes could potentially put some small firms out of business. If the cuts cannot be avoided, the FSB claims, it would be better to provide per cent relief or at least to allow a business to claim Small Business Rate Relief on their empty property.
DMH Stallard are a unique multi-disciplinary team of legal experts and chartered town planners have particular specialisms in heritage and listed buildings, house building, waste and renewables, infrastructure, retail, leisure, education and public sector work. They are consistently ranked as a “top firm” in the planning and environmental field. Find DMH Stallard in the Heritage Register
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