Empty commercial properties ‘demolished because of rates’

Posted 31/12/2009

Landlords are choosing to demolish buildings in order to avoid paying taxes on empty commercial properties.

The regulations relating to relief on empty commercial properties changed in 2008, meaning owners of vacant shops and offices now only receive a three-month exemption from business rates.

A report by the Conservative Party found that some commercial property owners have taken drastic action in order to avoid paying business rates on their empty properties.

The party’s researchers estimated that as many as 8,900 properties have been demolished because their owners could not afford to pay business rates when they were not earning any income from them.

It is thought the recession has exacerbated the problems facing commercial property owners, leaving many struggling to pay their business rates.

The change to empty property tax was intended to encourage landlords to re-let properties quickly, but the country’s economic problems mean there are fewer potential tenants looking for premises.

Owners of vacant town centre properties may be able to avoid paying business rates by letting them to a non-commercial organisation on a meanwhile use lease basis.

This would involve a charity or arts group using the premises rent free, although the lease would allow the landlord to get the property back at short notice once they find a paying tenant.

Landlords who use meanwhile use leases will be able to avoid empty property rates, as well as having tenants in place to maintain their premises.