Commercial property tax slammed
Rate relief change already having a negative effect on business says councillor
the Rating (Empty Properties) Act
2007 which came into effect on
01 April 2008
A tax change on empty commercial property is already "seriously threatening business growth in Swindon", according to Nick Martin, lead Swindon Borough Council [SBC] member for Finance and Resources.
A comment that comes after recent calls were made in Parliament to re-instate full business rate relief on vacant shops, offices and industrial property as the economic downturn gathers pace. And after SBC paid £430,000 to demolish part of its property portfolio to avoid paying £110,000 a year tax on it.
Prior to April 2008, most empty business properties received 100 per cent relief on business rates for the first three months and 50 per cent thereafter.
landlords are already considering
empty for more than
3 months to be
But now all unused commercial property has to pay full business rates after a three-month period of grace for commercial premises and six months for industrial property and warehouses.
"We flattened the former Clares Retail building because it didn't make financial sense to leave it on the market in its present state," councillor Martin told SwindonWeb.
"The tax change couldn't have come at a worst time. Rental and sales of commercial property is suffering a downturn alongside the rest of the economy.
"We need to be spending money encouraging business growth in Swindon instead of using it to avoid this ill thought-out stealth tax."
The changes, Martin added, were also discouraging speculative development of office space because property companies feared the added tax if there was difficulty finding tenants.
"It's full effects are starting to be seen. It's the wrong tax at the wrong time and it's already seriously threatening business growth in Swindon."
A government statement says it is "monitoring the impact of the reforms, with provisions in the legislation for rates to be cut by 50% again depending on the state of the economy."