05 June 2008

Changes to empty property rates for Commercial Properties

There has been a recent change in the Rates that are payable for commercial properties which I believe will have a significant impact on the commercial property market.

With effect from the 1st April this year, empty commercial property will be hit with an occupied rate liability.

The Rating (Empty properties) Act has made some amendments which include:

"Replacing the current permanent exemption for industrial properties with an exemption for the first 6 months only.

Properties that have been empty for more than three months will no longer receive 50% relief from rates. In the case of industrial property, those that have been empty for more than six months - will no longer receive 100% exemption from rates".

The Government's view is that the changes will enhance the supply of commercial property and create a downward pressure on rents making occupation of commercial property more affordable. However, it may have significant negative effect as any landlord or developer will be less likely to engage in development as they will not want to risk having a vacant property. This will also mean if there are any vacant properties where the owners have not done anything about it so far this may kick start them to sell to off load them.
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