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24 November 2008

Seven out of ten empty commercial properties will benefit from tax exemption

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by Lin Freestone

Seven out of ten empty commercial properties will benefit from tax exemption

From April 2009, empty commercial properties with a rateable value below £15,000 will be exempt from business rates. It is estimated that the exemption should cover seven out of 10 empty properties

This exemption to 2009/10 has just been announced by the Chancellor of the Exchequer, Alistair Darling, in his Pre-Budget Report.

The decision to remove tax relief from April 2008 on empty commercial premises has forced many firms to demolish properties as they struggle to keep up with rate payments. Businesses have had to pay tax on a building if it is vacant for more than three months.

The commercial property world has been lobbying the Government to review the decision to scrap the relief. More than 60 Labour MPs signed motions supporting the abolition of the tax, which was introduced to keep the property market moving and to prevent developers and property owners not letting buildings as they waited for rents to rise.

However, the scrapping of empty rates relief came in as demand for commercial property fell in the economic downturn. Figures from the Investment Property Databank show that commercial property capital values decreased by 4.3% in last month.


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