70% of empty commercial properties to benefit from tax exemption

Posted under Advice by Alan

With effect from April 2009, empty commercial properties having rateable value below £15,000 will be entitled for business rates exemption. The exemption is expected to bring big relief for nearly 70% of properties in the UK.

The exemption from rate tax was announced in the Pre-Budget Report presented by Chancellor Alistair Darling.

Many firms had demolished their empty commercial properties after withdrawal of tax relief by the Government in April 2008 as they were struggling to continue with rate payment without any income from their empty properties. Payment of tax was mandatory for buildings lying empty for more than 3 months.

The commercial property owners were demanding the Government to reconsider its withdrawal of tax relief. A motion, supporting abolition of tax was introduced by 60 Labour MPs to prevent a collapse of the property market and restrain owners and property developers from denying letting to thousand of potential tenants for the sake of higher rents.

At a time when there is sharp fall in demand for commercial property due to economic downturn, the announcement of relief has come as blessings in disguise. Investment Property Databank figures indicate 4.3% decline in commercial property capital value in last month.

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