Empty property misery predicted

Small businesses are entitled to a relief on paying business rates of 50% for
properties empty for more than three months. Now they will have to pay the full

Companies with industrial and warehouse properties will have to pay the whole
amount after six months, rather than getting a 100% deduction as previously.

Deloitte Real Estate Tax Partner Phil Nicklin, said: ‘The government would
like this measure to encourage empty properties back into the letting market,
but ironically it could encourage owners to partially demolish them to take them
off the rating list altogether.’

The move is set to benefit the Exchequer to the tune of an extra £950m by the
end of the 2008 tax year and by another £900m during 2008/09.

In coming to his decision to withdraw the breaks, the chancellor said that he
had followed the recommendations of the Barker Report which set out a range of
policies for improving the functioning of the housing market and representations
from the Federation of Small Businesses.

‘Commercial property lying empty should not continue to be given generous
business rate relief, particularly because this leads to higher rents in areas
with highest demand,’ said Brown.

‘To encourage better use of commercial premises I will restrict the relief
available for empty industrial properties to six months, and for empty offices
and retail to three months.’

Brown decided to spare charities from the same fate by announcing a get out
clause for charitable organisations.

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