Property sector urged to back rates hike petition

IRWIN Mitchell’s real estate team in Yorkshire is urging developers and landlords to throw their weight behind a new petition to get the government to scrap its empty rates hike.

Experts at the law firm say the rates are hurting development and stalling new business growth.

Now the British Property Federation (BPF) has instigated a new petition calling for the government’s decision to lower the empty rates relief threshold to be reversed.

Empty rates relief was severely curtailed in early 2008. Until then industrial property landlords paid no business rates on empty buildings, while others, mainly offices and shops, had three months of no rates and 50% relief thereafter.

After the review, industrial property owners pay no rates for a period of six months and thereafter pay 100% rates. In relation to shops and offices, no rates are payable for a period of three months and thereafter 100% rates are payable.

As a concession to the industry, the government allowed for “targeted relief” for any empty property with a rateable value below £18,000. However, from April this year it lowered this threshold to £2,600 rateable value.

The BPF assesses that this will cost businesses an additional £400m a year.

Thomas Hall, an associate solicitor in the real estate team, said: “Being required to pay full business rates on empty premises is a serious problem for developers and landlords, exacerbating the issues that many are already facing in the current economic climate.

“With money tight for many companies, being forced to expend further money on tax on their empty buildings means that this money cannot be used for other business purposes such as research and development, staff hires, or to fund growth.”