Stephensons is reminding businesses with empty buildings in their portfolio that tax rises are just around the corner, after new legislation that will effectively double their business rates was officially laid down in parliament.
The Rating (Empty Properties) Act 2007 will come into force from April 1st, meaning commercial property owners who currently enjoy a 50 per cent reduction on business rates for empty properties will now be forced to pay the full 100 per cent, despite receiving no income from the property.
Local Government minister John Healey confirmed the final details of the plans, which were announced in the 2007 Budget in a bid to reduce commercial rents and bring redundant buildings back into use.
Stephensons Solicitors LLP, believes the new rate rise may not have the desired effect, and the extra costs could instead cause greater financial pressure on already struggling businesses.
David Baybut, Head of Stephensons’ Commercial Real Estate department, said: “In a matter of weeks owners of empty commercial properties are going to see their rates literally double. Yes, this rate change will act as a strong incentive to find tenants for empty properties, but many buildings are empty for a reason, and a higher rate of tax could potentially financially cripple businesses.
“It does seem ironic, that during what is being billed as an economic downturn, the Government is introducing another stealth tax on businesses. There are some exceptions though - charities and community amateur sports clubs will be granted a complete exemption from rates on their empty properties, while companies in administration or liquidation will also not have to pay the full rate.”
