The vast majority of surveyors believe that charges levied against empty commercial properties are ‘significantly detrimental’ to the recovery of the nation’s local economies, a report from the Royal Institution of Chartered Surveyors (RICS) found.
The new survey from RICS found that 90 per cent of surveyors claimed that extortionate Empty Property Rates (EPR) are hampering local economic recovery in the UK.
75 per cent of those who responded also believed that the rental value of retail properties would decrease as a direct result of EPR.
Nine tenths (88 per cent) also considered EPR to be a significant deterrent for the speculative building of commercial property.
Jonathan Cornes, Building Surveyor from Jonathan Cornes Associates said: “The charges faced by property owners are quite simply crippling the high street and preventing businesses of all types from achieving financial stability. It is clear that in this difficult economic climate, businesses need all the help they can get.
“We would like to see the government take the initiative in the forthcoming Autumn Statement and offer property owners a longer exemption period. This would allow commercial landlords some much needed breathing space and contribute towards getting the business sector moving again”.
Owners of commercial premises, including both offices and high street shops, are not required to pay business tax for three months after they are vacated. This period is extended to six months for warehouses and other industrial properties.
However, beyond this period, EPR are applicable at a full rate, leaving many businesses with a hefty tax bill which they cannot fund.
68 per cent of respondents also claimed that commercial property floor space was vacant for periods in excess of six months, meaning that owners face unmanageable taxes when their businesses are at their most stretched.
Over half of those surveyed said that they believe such factors can lead to property owners demolishing their business premises rather than face the tax.
Rates collected from taxpayers are initially passed to central Government before being redistributed back to Local Authorities as part of the Local Government Finance Settlement. These funds are then used towards paying for local services.
RICS has called for the Government to extend the exemption period for commercial property owners in its forthcoming Autumn Statement, allowing premises owners without tenants to avoid EPR for six, rather than three, months.
It has also asked for industrial property owners to be granted an extended 12 month grace period.
Property Aspects Magazine appreciates the expertise and advice from Jonathan Cornes in the compilation of this article