End of rate relief on empty plants attacked

Jul 25 2007 by Tony McDonough, Liverpool Daily Post

GOVERNMENT plans to remove rate relief on empty industrial premises could damage regeneration in Merseyside, according to a developer of industrial space.

The Empty Rates Bill expected to come into effect in April 2008, will only offer rates relief on empty industrial properties for the first six months of ownership. Following this, owners will be liable for 100% of the rates for a fully let building.

The Government hopes the Bill will stop investors sitting on derelict property and speed up the pace or regeneration both in Merseyside and the UK as a whole. However, industry experts believe the Bill could have the opposite effect.

Chris Hughes, director of industrial landlords and developers Spencer Holdings, said: “If this Bill comes into effect it will discourage speculative investment, slowing the pace of regeneration in the region.

“Disadvantaged areas in Merseyside will suffer the worst. Developers won't want to take the risk in regenerating rundown areas where demand for properties is weak because they could end up sitting on vacant premises but being liable to the payment of business rates in the process.

“Improvements in the carbon footprint of buildings could also be delayed with landlords unwilling to leave properties vacant while improvements are made.”

The new law is expected to raise more than £1bn annually and many believe this is the real driving force behind the legislation.

Mr Hughes added: “This is a stealth tax rather than a solution to regeneration issues. We all recognise the need to stop investors sitting on derelict property, however the Bill in its current form will cause more negatives than positives.

“If the Government is intent on introducing such a Bill then it needs to include dispensations based on factors such as the current state of the property and its location.”

tonymcdonough@dailypost.co.uk