North East business leaders call for re-think on empty property tax | 28 November 2012
Business leaders in the North East of England are calling on the government to review taxing commercial property owners for their empty buildings.
A recent poll of Royal Institute of Chartered Surveyors (RICS) members concluded that most believe that these tax rates are stifling regeneration and hindering growth in many parts of the country.
It’s believed that the North East could be particularly at risk of this. A recent report by One North East – a paper that was co-authored by RICS’ North East spokesman Kevan Carrick – claimed that the tax will take around £35 million out of the region by 2009/2010. However after re-assessing, Mr Carrick believes this figure actually ended up being closer to £100 million.
The RICS is concerned that because of the tax, many landlords are struggling to develop their property portfolios and attract new business into their buildings, says bdaily.co.uk. Some buildings are even being destroyed as a preference to keeping them going without tenants.
Retail units and offices are permitted to be tax-free (business rate relief) for up to three months before they must start paying again, says gov.uk. Factories meanwhile have six months.
Paul Easton, the head of business rates at Storeys Edwards Symmons property consultants said that his firm have noticed the struggle for businesses to move. “Companies who are growing and who are maybe wanting to move into new or larger properties may still have the old property and have the empty rate liability on that property which could be significant,” he said.
North East Chamber of Commerce policy advisor, Amy Michie, meanwhile commented on the worrying news – highlighting how it is more cost-effective to destroy older buildings.
“Firms will have to pay tax on properties earning them nothing, while the forced demolition of perfectly usable buildings will mean less affordable space available for new businesses as we emerge from recession,” she said.
The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.
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