22/04/2009 - Buildings levelled to avoid rates
The scrapping of relief on empty property rates has increasingly led owners to knock down unused buildings rather than pay the tax, according to research.
A survey by the Royal Institution of Chartered Surveyors (Rics) and consultant Lambert Smith Hampton found 75% of respondents believed the ditching of relief on almost all commercial property from last April increased the strain on the sector and increased demolition of empty buildings.
Following changes introduced 12 months ago, empty property is not liable for rates for three months, but then charged at the full rate. Previously, the unused buildings were only charged 50% of the rate after the three-month period had elapsed.
A spokesman for Rics claims tearing down the properties could lead to a shortage of commercial property once the economy goes into recovery.
Changes mean empty industrial and storage properties also have to pay the full amount after six months. Under the old rules, the buildings were exempt from business rates altogether.
The Government's plans were predicted to bring in an extra £950 million in 2008/09 and an estimated £700 million in the current financial year, despite concessions exempting an estimated 70% of properties announced in November's Pre-Budget Report.
Copyright © Press Association 2009
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