Empty Property Rates 'demolishing' town centres
Published by Max Salsbury for 24dash.com in Central Government and also in Development, Finance, Local Government
Empty Property Rates (EPRs) are forcing property owners to demolish their town centre premises, according to new research from RICS.
Over 50% of surveyors questioned said they believed EPRs were a contributory factor in property owners tearing down their buildings, whilst 90% said that charges placed on shops and offices are "significantly detrimental" to the recovery of the nation’s town centres.
Business rates on commercial premises like shops and offices are frozen for the first three months after becoming vacant, but after this period EPRs are charged at the full rate - which RICS says leaves many with a tax bill they are unable to pay.
Of the 150 RICS members that responded, 84% support extending the current rate holiday period and 82% support a 12-month EPR exemption for new builds.
The majority of respondents (89%) believe that EPRs are restricting economic growth, while 88% consider them a significant deterrent for speculative building, and 87% said they believe EPRs have had a negative effect on investment across all sectors.
Business rates are collected by central government before being redistributed to councils as part of the Local Government Finance Settlement, which are then used to finance local services.
RICS is now urging the Government to make changes to its forthcoming Autumn Statement and extend the current three month EPRs exemption period for commercial property to six months.
Simon Rubinsohn, RICS chief economist, said: "The charges faced by property owners are quite simply crippling the high street and preventing businesses of all types from achieving financial stability. It is clear that in this difficult economic climate, businesses need all the help they can get.
"We would like to see the Government take the initiative in the forthcoming Autumn Statement and offer property owners a longer exemption period. This would allow commercial landlords some much needed breathing space and contribute towards getting the business sector moving again."