Empty rates change slammed
YORKSHIRE’S commercial property sector has given a lukewarm response to Chancellor Alistair Darling’s announcement on empty rates, saying the changes do not go far enough.
In the pre-Budget report, Chancellor Alistair Darling announced that the move will include properties with a rateable value of below £15,000, which make up 70% of vacant buildings in the UK.
Businesses will have relief from property rates from 2009/10.
Robert Brown, head of rating services at chartered surveyors Sanderson Weatherall, said the Chancellor had “missed the chance” to win the support of big businesses.
Mr Brown said: “Since the punishing new regime of empty rates was introduced with quite unbelievably bad timing in spring 2008, the property world has, over recent months, unleashed a barrage of criticism against the Prime Minister and his trusty sidekick.
“The Chancellor has appeased small business by declaring a one year amnesty for empty properties falling below an increased rateable value threshold of £15,000. Seventy per cent of small businesses will therefore escape their killer empty rates bills for one year from April 2009, which threatened to drive some of them into bankruptcy. On the face of it, the statistics sound good.
“Larger properties receive no respite within the new rates changes however and the crunch both on brand new developments and on the refurbishment of worn out buildings in our major towns and cities is set to tighten.
“Major regeneration projects that have badly faltered due to the April 2008 changes seem destined to continue along that path, as few of their crippling empty rates bills will be based on rateable values less than a paltry £15,000.
“Once professional business rating advisers have fully explained the hidden consequences of Darling’s dabbling to their retail, office, manufacturing and distribution clients, any hastily opened champagne bottles will be sure to rapidly lose their fizz.”
Liz Peace, chief executive of the British Property Federation, said: “The chancellor said that this would help 70% of properties, but buried in the small print is the revelation that this will only give back around £185m of the predicted £1bn hit to business. But this is not retrospective and it is not immediate. The smallest firms will somehow have to struggle on until next April.
“While there are 1.7m properties liable to pay rates, this could include anything from a single room to a large shop. This change will help only the very smallest property owner. The majority of small firms will continue to be damaged by the government’s ill-thought out taxation. The regeneration of our deprived areas will continue to suffer and buildings will continue to be demolished.”
Linda Riordan, Labour MP for Halifax, said: “I welcome the change but would have liked it to have been extended beyond this bare minimum. The majority of those who are affected by this across Halifax and the rest of the country will have properties with a much higher rateable value than £15,000. I would like to urge the Chancellor to look again at this as we desperately need to offer real help to firms hit by the downturn.”
The controversial legislation has been slammed by property owners since its introduction earlier this year, with reports of firms knocking buildings down to avoid the charge being made.
Some of the biggest names in the sector have criticised the Government after it scrapped the relief enjoyed by retailers, offices and manufacturers on empty property taxes in April, meaning businesses have to pay tax on a building if it is vacated for more than three months.
