Government proposals to end annual tax relief on empty business premises in England and Wales was yesterday condemned by the British Property Federation (BPF) as a whitewash that would prove disastrous for regeneration.
On Monday the Department for Communities and Local Government launched a three month consultation on abolishing tax relief on empty properties - worth £1.38bn in England alone - to help bring disused buildings and land back into use.However, responding to the consultation BPF finance and investment policy director Gareth Lewis said: 'Currently, companies looking at investment opportunities in deprived areas would be prepared to take the costs of temporarily leaving properties empty on the chin while they redevelop an area and woo in business tenants and retailers. Cutting relief will tip the balance and remove the viability of regenerating Britain's poorest areas, widening the poverty gap even further.'Since 1966 all non-domestic properties have had to pay a business property tax which varies according to the size of the premise. Owners of unoccupied business premises currently qualify for a minimum 50% cut in the business rate, with owners of empty industrial premises enjoying a complete exemption from rates.The Government argues that this regime was introduced in the 1980s during periods of economic recession and low demand for property and land, and since then Britain's fortunes have completely reversed, with property and land the most sought after of commodities.'In these circumstances it does not make sense for other taxpayers to subsidise owners to keep properties empty,' says the consultation.BPF chief executive Liz Peace said: 'The government believes that taking away rate relief will force people into filling their buildings. This defies common sense in that no one deliberately keeps properties empty - it helps no one - landlord or tenant, and cutting the incentives for those companies willing to take on and regenerate what are initially non-profitable areas, will similarly serve only to harm those areas. Cutting this relief ignores the basic fact that having empty property is a something that no landlord deliberately seeks.'