The government has been accused of empty spin after chancellor Darling’s claim that 70 per cent of properties would be helped by an empty property rates (EPR) holiday for properties with an estimated value of less than £250,000. But this figure includes cash machines, advertising hoardings and other things no one would regard as properties, according to the British Property Federation.
The small print of the report also shows the cost of this tax cut to be just £185m, which is just 20 per cent of the £1bn the government hopes to raise through EPR.
Regeneration chiefs are also furious that this short-sighted approach will reap long-term damage to the economy by undermining investment.
The exemption will apply for properties with a rateable value of less than £15,000 and follows a long running campaign led by the British Property Federation. Firms who pay rent below £20,000 a year will be spared but a typical high street shop or office in any part of the country would still have to pay.
An average-sized industrial property would have a rateable value of at least £40,000, meaning that many properties will continue to be demolished.
Commenting on the problem, Phillipa Pickavance of Drivers Jonas, said: “Although the property industry tried to lobby against this legislation, the general view is that there was not enough consultation prior to its implementation, damaging enough in the relative ‘boom times’ in which it was conceived, but fast forward 12 months to this uncertain and world economic crisis and it is crippling many occupiers/tenants and contributing to the stagnation of any speculative development.”
Liz Peace of the British Property Federation, recently summed up the situation when she said: “It’s worrying that people running the country have such fundamental misunderstandings of how business works. You can’t tax something earning no money and expect that to conjure up tenants when demand is falling through the floor. No one is asking for handouts, just a reality check. We must stop this empty rates madness.”
The BPF is encouraging people to sign a No 10 petition and warns that the “bomb site Britain” effect of buildings being demolished will only get worse. It is urging those affected to join 5,000 others who have signed this petition: http://petitions.number10.gov.uk/emptythreat/