Wednesday, May 25, 2011

News: Empty rates tax poses growth risk


Leading commercial property consultancy Knight Frank has warned the return to the charging of business rates on empty small business properties could stunt economic growth in Yorkshire.

The tax changes, which took effect from the beginning of April, reduce the level at which business rates kick in for empty non domestic property – from a rateable value of £18,000 down to £2,600.

Jeremy Wilson, partner with international property consultancy Knight Frank in Sheffield, and previously the vice chair of the Achieving Board in Rotherham said: "Businesses and developers need support to re-start growth and encourage investment but the new empty rates tax measures will substantially hinder this process.

"It is disappointing that the Chancellor decided not to return to the position prior to 2008 when empty office and retail properties received 50 per cent relief and industrial properties 100 per cent relief. In the current recession businesses are ultimately the key drivers for the economy to recover and they should not be subject to this additional tax.

"Prospects of a recovery in the commercial property market are being jeopardised by the controversial tax on unoccupied property. Businesses will be reluctant to relocate to new premises if they are left to pay business rates on their vacant existing premises, whilst developers cannot afford to incur empty rates whilst seeking occupiers for new premises.

"There is the fear that when the economy does return to full steam there'll be a lack of commercial properties on the market, not only in Yorkshire but nationwide."

Mr Wilson said that the tax is proving to be obstructive, with businesses being forced to take extreme measures to protect themselves during the tough economic conditions.

He added: "Properties are not left vacant deliberately and I do not believe a charge on empty property is an effective way of encouraging redevelopment of vacant sites across Yorkshire."

Knight Frank are a key player in the Rotherham commercial property market with recent deals including MTL Group's move to a new 300,000 sq ft advanced manufacturing facility at Brinsworth and UK Mail's relocation across Rotherham to the Magna 34 Business Park.

Knight Frank website


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