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Commercial property landlords facing £1.1bn vacant rates bill

Commercial property landlords in the UK are having to pay out £1.1 billion every year on business rates on vacant properties, new research has shown. 

 

The research, carried out by the Taxpayers’ Alliance (TPA), found that the £1.1 billion paid by landlords in 2011/12 was a rise of 19 per cent from the amount paid in 2009/10.

 

London landlords have been particularly badly hit by the rates, which started applying in 2007, after exemptions that had protected empty industrial properties and reliefs and reductions that had applied to empty commercial premises were lifted.

 

Westminster, London’s wealthiest borough, paid the highest amount in empty property business rates – some £100.7 million – although Tower Hamlets, the next highest, paid just £18.3 million.

 

The chief executive of the TPA, Matthew Sinclair, said that the rates represented an “unnecessary burden” on the nation’s commercial property landlords, and was encouraging increasing numbers of demolitions.

 

He said, “The rest of us lose out as the mere threat of having to pay rates on empty properties is discouraging people from putting money into new developments or refurbishing existing properties, which is undermining the prospects for economic growth.”

 

While government sources have raised the point that Westminster’s disproportionately high bill for empty property rates may be due to overly expensive rents in the borough, the TPA has said that, regardless of rent amounts, the taxes are serving as barriers to growth.

 

TPA campaign manager, Robert Oxley, explained, “Regardless of whether it is the most expensive you are not getting any rent so it makes it difficult to do anything with that property.”

 

He added that the TPA is calling for reliefs to promote pop-up stores to be enacted and a six-month vacancy grace period that was previously abolished to be restored.

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