    |
|||
        |
|||
Empty Office Tax
A planned change in taxation for empty offices will cost Swindon property
owners more than £3m a year and possibly create a barrier for regeneration.
This is the verdict of King Sturge. According to Jeremy Sutton, the partner
heading King Sturge’s Swindon agency team: “The Government’s
plan to end the practice of having business rates on empty office buildings
and no rates on empty warehouses, from next April will put a brake on
new regeneration developments, and cost existing office buildings at least
£5 million per year in extra tax.
Swindon has seen a much-need surge in office regeneration. This means
that, at any given time, there is about 1 million sq ft of empty office
space in the town, waiting for completion of occupancy agreements. On
average, that process can take about nine months.
Until now, empty offices have been charged at half the normal business
rates: but from next April, the Government wants to end that formula.
With business rates for office space currently charged at between £4
and £6.50 psf per year, it means that the Government will grab at
least £5m extra tax overall while those offices remain empty”,
said Mr Sutton.
West that this tax plan will end rate relief for empty listed buildings.”
The Government plans no change in the current arrangement, whereby new
or empty business buildings remain exempt from business rates for the
first three months, but their proposal to charge full rates after the
third month is a punitive new stealth tax, according to King Sturge.
The result of this new tax-grab will be an inevitable brake on encouraging new development of workspace, and make it even harder for owners of listed buildings to keep them available for workspace, rather than converting them into flats”, said Mr Sutton.
It is a similar picture for industrial and warehousing buildings, also affected by the planned new tax.
Giles Weir, King Sturge’s industrial agent in Swindon said: ”While there remains a shortage of both office and industrial space to meet market demand, it is a face that Swindon currently has about 1.5 million sq ft of industrial buildings vacant while awaiting tenancy agreements.
At an average business rates figure of £2.25 psf with industrial buildings tending to remain empty for about nine months, that will not mean and extra penalty of £3m per year for developers and investors”, said Mr Weir.
According to Jeremy Richards, partner in charge at King Sturge in Bristol: “At a time when Government policy is forcing local councils to re-allocate workspace land to the need for housing, this area has a very shortage of new workspace.
By penalising owners of offices and industrial buildings waiting for new occupants, the Government’s new rates plan runs the risk of discouraging new workspace development and regeneration. It is especially harmful to the