Pictured above: Mark Clapham
The previous Government's empty property rating legislation has
proved disastrous, and is causing damage to many businesses across
the Midlands according to business rates experts at national
commercial property consultancy Lambert Smith Hampton (LSH).
The Labour Government introduced Empty Property Rates in 2007 -
effective from April 2008 - with the intention of delivering
affordable rents, despite the concerns of the rating industry.
Under the legislation commercial buildings which remain empty for
more than three months - or six months for industrial property -
are subject to 100 per cent rates liability. The threshold for
exemption fell in April from a rateable value of £18,000 to
£2,600.
Now LSH is calling for the legislation to be rescinded as soon
as possible because of the damage it is doing to business and the
negative effect on new development.
Mark Clapham, Director of Rating in LSH's Birmingham office
said, "While the Coalition Government is rightly seeking to rebuild
the economy through industry and commerce, this legislation is
acting as a disincentive to developers and it is estimated it will
cost business owners £400 million this year alone."
He added, "This can only exacerbate the challenge of
synchronising future supply with the levels of demand which
Government policy is being designed to create. The time is right
for empty property rates legislation to be scrapped. As we
predicted, the policy has failed to manipulate the market towards
the intended goal of realistic and affordable rents and it would be
unfortunate if this Government is viewed as having aided and
abetted a policy disaster which was not of its making."
Mark Clapham also pointed out that the combination of empty
property rates and the recent announcement of a 12 month extension
to Small Business Rate Relief for property with a rateable value
below £6000 would lead to unintended consequences.
He said, "Occupiers of property with a rateable value below
£6000 should ensure that they continue to occupy the
property, at least until 1st October 2012. Otherwise, not only will
they lose Small Business Rate Relief, but they will also become
liable for 100 per cent empty property rates."
For more information about Lambert Smith Hampton, please visit
their website here: www.lsh.co.uk