Pre-Budget Report: Empty property rates relief extended

THE commercial property sector was given a boost in today’s Pre-Budget Report as Chancellor Alistair Darling extended the relief from empty business property rates for another 12 months.

Properties with a rateable value of below £18,000 will be exempt from paying tax on vacant commercial properties from 2010/11.

Mr Darling said the move would mean that 70% of commercial property would have relief from property rates.

Terry Jones, tax partner at BDO in Leeds, said: “This move hasn’t got a significant additional impact. Both the North West and Yorkshire has suffered from the recession in property and this will help. If it had been withdrawn it would have hit the property sector. The Chancellor has tried to do things that reduce pain.”

Previously properties with a rateable value of below £15,000 have been exempt from paying empty rates.

The legislation, introduced controversially by the Chancellor in 2008, has been slammed by property owners, with reports of firms knocking buildings down to avoid the charge being made.

It has also been criticised as hindering speculative development.

Richard Wackett, head of national rating at Lambert Smith Hampton, said: “The fact remains that the punitive imposition of business rates on empty properties continues to stifle development and urban regeneration. 

“The extension will be of little use to larger regeneration areas and will not cover most major office, warehouse, industrial or retail schemes.

“The exemption is designed to cover the interests of the small scale investor holding nursery units or small commercial interests.”

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