Empty rates kick in
From April 1 2008, with a few exceptions, all unoccupied commercial property in England and Wales became liable to pay 100% business rates due to the abolition of empty property rate (EPR) relief, first introduced almost 30 years ago. In addition, the commencement of the exemption period has been set retrospectively, meaning that anyone with a property that has been empty for more than six months for industrial, or three months for all other commercial property, becomes liable to full rates with immediate effect.
Andrew West, a director at property advisors Cooke & Arkwright was involved in consultations in 2007 with the Welsh Assembly Government on behalf of the Royal Institution of Chartered Surveyors and the CBI, where concerns were raised about the abolition of the EPR relief and the effect it would have on business in Wales.
“The outcome was disappointing as we had lobbied hard,” said Mr West. “The rates liability will be the same in both England and Wales, while Scotland has opted out of the scheme. There can be little doubt that the legislation is going to have a negative impact on commercial property and the timing in view of the current economic climate is unfortunate. It’s going to prove costly to business and we already have evidence of the additional rate burden stopping speculative development and refurbishment of older buildings. This is a cause of some concern as these developments are a catalyst for job creation.
Property owners are concerned that the rates will restrict their capacity to upgrade or redevelop empty property in order to attract potential occupiers. It can take many years to obtain planning permission and build or carry out refurbishment on obsolete buildings for which no demand exists. Keeping a property empty is already costly due to maintenance, service, funding and marketing costs. It does not benefit any owner to keep a property empty and some of the increased costs are likely to be passed on to occupiers.”

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