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Empty property tax – Is it stalling the recovery of the commercial property sector?

Empty Property RatesOver 90% of surveyors believe that charges placed on shops and offices are ‘significantly detrimental’ to the recovery of the nation’s town centres. Over half also believe that charges are even a contributing factor in property owners demolishing their premises, according to a new survey from RICS.

When commercial properties, become vacant the owner is not required to pay business rates for three months. For industrials and warehouses the rates extend to six months. However, after this period, these charges – known as Empty Property Rates (EPR) – are applicable at the full rate, leaving many with a huge tax bill which they have no means of funding.

Worryingly, with the industry still suffering, and many commercial premises being left vacant for periods of over six months, the problem of unmanageable taxes is widespread at a time when businesses are most stretched.

With the situation continuing to impact so significantly on towns across England and Wales, the knock on effect is also being felt in capital values. 75% of respondents believe that the rental value of retail premises will decrease as a direct result of EPR.

Jonathan Cornes of Chartered Building Surveyors, JC Associates said ”The charges faced by property owners who’s premises are vacant are quite simply crippling and area causing owners unmanageable taxes and an uncertain financial stability. Businesses, in particular retail, need all the help they can get.”

“It would be nice to see property owners offered a longer exemption period. This would allow commercial property owners some much needed breathing space and contribute towards getting the business sector moving again.”

Property Aspects Magazine appreciates the expertise and advice from Jonathan Cornes in the compilation of this article.