Empty rates relief can “remove fear factor”

21/06/2012

The Government has confirmed it is considering offering business rate exemptions on vacant properties.

The move comes after an industry investigation revealed taxpayers were footing multi-million pound bills in empty property rates.

Following a study by Estates Gazette, which found local authorities across the UK were paying £50 million in rates on vacant buildings, George Osborne has tasked MPs to produce proposals on how the empty rates rules could be changed.

The move has been welcomed by East Yorkshire-based commercial property agents, who say it would kick-start speculative developments across the region.

Interviewed for the Hull Daily Mail Business & Commercial Property supplement, Dave Garness, Managing Director of Garness Jones, said: "The current system discourages developers from starting speculative developments by leaving them liable for rates as soon as the development is completed.

"Extending empty rates relief for new build and for substantial refurbishment would remove the fear factor that prevents landlords from building at a time when the economy is patchy and unpredictable."

Empty property rates have been something of a hot potato among the corridors of power.

Up until March 2011, vacant properties with a rateable value of less than £18,000 were exempt from paying rates thanks to the empty property rate relief scheme.

The scheme, which was designed to stimulate growth, was scrapped last year. However, until March 2012, empty buildings with a rateable value of up to £6,000 were still exempt. Relief was also extended to empty properties with a rateable value of up to £12,000.

Despite lobbying from property professionals, the construction industry and The British Chambers of Commerce, among others, this relief was scrapped by earlier this year as part of George Osborne's Budget.

Now, only empty properties with a rateable value of £2,600 or lower are exempt from paying rates.