Attacks continue on UK 'empty rates' despite partial reprieve

Commercial property professionals have dismissed the decision by UK Chancellor of the Exchequer Alistair Darling to suspend the 'empty rate' tax on smaller buildings as too little, too late.

During his pre-Budget speech in the House of Commons on Monday, Darling announced that the rates would be scrapped during the 2009-10 year for buildings that pay less than £15,000 in business rates. He said the measure would affect some 70% of all vacant buildings in the UK.

Landlords and lobby groups such as the British Property Federation (BPF) have been campaigning for a year for the tax to be scrapped completely. The BPF has long dubbed the measure as the 'Bombsite Britain tax', as the organisation claimed landlords would demolish their properties rather than pay the rates. Liz Peace, the British Property Federation's chief executive, said in October: 'It's like making the unemployed pay income tax.'

Property advisers have also been vocal opponents of empty rates.

Responding to Monday's announcement, Angus McIntosh, head of Research and Partner at King Sturge in London, said the empty rates tax was wholly inappropriate. 'Forcing companies to pay rates on empty buildings (especially in a recession), particularly SMEs, should never have been introduced in the first place.'

'The government's announcement to exempt empty rates tax from buildings with a Rateable Value below £150,000 is a sop to the property market; it remains an unnecessary 'tax cash cow' for the government, doing absolutely nothing for companies and investors this tax year, and hardly scratching the surface of the problem in the next. As the recession deepens the government aims to make more money from the dying patient,' he said.