Insurance News Archive

Rics: Changes to empty property relief "could have significant adverse affects"

Gordon Brown's Budget speech included a decision to restrict empty property tax relief, effectively placing a charge on owning empty property if it remains that way in an effort to ensure all current space is used.

But the Royal Institution of Chartered Surveyors (Rics) believes that this "could have significant adverse effects on commercial property" due to the added risk of incurring costs if property is unable to be let.

Under the new system coming in from April 1st 2008, offices and retail premises will now only be eligible for relief from rates for three months after the property is vacated, while industrial sites and warehouses are allowed six months' grace.

After this period, full Non-Domestic Business Rate will be chargeable.

"Properties are not left vacant deliberately and the Rics does not believe that a charge on empty property is an effective way of encouraging the redevelopment of vacant sites or empty property," the institution said in a statement.

Rics suggest that the removal of the relief will cost the commercial property sector more than £1 billion each year and believe that owners may resort to deliberately damaging their property to avoid eligibility for rates, as well as making more claims of dilapidation.

26 Mar 2007