Report a Fault 2007 Budget – Empty Property Rates,
(published in the Estates Gazette dated 14th April 200 written by Mr John Fifield, Chairman of Fifield Glyn)
I am very concerned about Empty Property Rates. The present position (up to 1 April 2008) is
that shops and offices have 3 months rates free after each occupation when unoccupied and are
then charged 50% of the rates. Industrial and warehouse property is completely rates free if it is
empty.
The new position will be that shops and offices will have 3 months rates free when unoccupied
then charged 100% rates. Industrial and warehouse property gets 6 months rates free then 100%
rates.
This is a vast increase in overhead and is probably the finest example of a stealth tax you will
find. Historically, empty properties were not charged rates but in the early 70’s Harry Hyam said
that he was deliberately keeping Centre Point in Central London empty until he found a single blue
chip tenant to take the entire building and each year it remained vacant he put the rent up. As far
as I am aware that is the only commercial building that has ever been kept empty on that basis
and it was extremely sad that a Conservative Government on a knee jerk reaction brought in
Empty Rates as a result.
There was no real justification for it then and there is no certainly no justification for what is now
proposed. It will add serious costs to businesses be they property investors or occupiers trying to
dispose of a building as they move elsewhere. It will be a severe deterrent to moving and it will
also be a deterrent to investors building speculatively, particularly in the poorer areas where commercial
property takes longer to let or sell. I suspect that the impact will reduce the investment value of commercial
property with the knock-on effects to Pension Funds, Stockmarket, etc and Banks who may well reduce their lending.
Most company borrowings are secured against their property.
Gordon Brown has said his new scheme will raise £900 million – I think the total cost to business could be many
times that enormous sum.
