Letter calls for end to tax on empty properties

Permalink: Letter calls for end to tax on empty properties
by Lin Freestone

An open letter has been sent to Gordon Brown from the British Property Federation, with the backing of some of the UK’s largest commercial property owners. They are calling for relief on the tax imposed from the beginning of April this year on empty property.

The letter asks for full relief from the taxation for the first three months that any property is unoccupied, followed by 50% relief on the tax for shops and offices for two years, and complete exemption for industrial properties.

It is estimated that the combined market capitalisation of the signatories to the letter is in the region of £370bn.

Major property development companies like British Land, Brixton and Land Securities have joined the campaign. Other UK companies with large real estate portfolios, including pension funds and local councils, are also calling for changes to the legislation.

One consequence of the tax is the deliberate demolition of warehouses and empty industrial units by their owners in order to avoid having to pay.

Introduced by the Treasury as a means of generating up to £1bn in revenue, the tax has placed a stranglehold on the property sector and is deterring the starting of projects, especially of speculative developments.

The British Property Federation fears that the tax is increasing the chances of bankruptcy for more firms, as the economy continues to contract. Liz Peace, the Federation’s chief executive considers that taxing hardship and business failure is a ludicrous way to help people through the hard times.