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Empty buildings 'could cost commercial landlords full rateable value'
24 Jan 2008
Commercial property landlords whose buildings are empty are to face tougher rules in the new tax year.
Starting in April, new tax rules could see proprietors paying 100 per cent of the rateable value, instead of the nought per cent they currently pay on vacant commercial properties.
Experts in Exeter have raised the prospect that the new rules will affect the market, with owners desperate to find tenants or even pull down buildings to avoid tax.
Calling the new rules a "hindrance to the sector", property consultant Tim Western told ThisisExeter: "Office properties are used to paying something, but not 100 per cent. Industrial properties are going from zero to 100 per cent.
He added: "Where landlords have a building and it remains vacant, they're going to be more flexible with terms. That means they may reduce the level of rent to get the tenants in. It should also encourage landlords to upgrade and improve premises to make them more lettable."
Mr Western also expressed his concern for new developments, saying: "Sometimes people want to build a lot of units speculatively - if you build in bulk you get economies of scale. People will reconsider doing so."
