British Property Federation sends open letter to PM urging relief on tax

Posted under General by Alan

The British Property Federation has sent an open letter to Gordon Brown calling for tax exemption on empty properties imposed by the Government, effective April 2008. The move is backed by some of the largest commercial property owners in the UK.

The letter urges full relief in tax for unoccupied properties for the first 3 months, followed by 50% exemption for shops and offices for 2 years and total exemption for industrial properties.

The signatories to the letter are estimated to make combined market capitalisation to the tune of £370bn. The campaign is intensified with the participation of major property development companies like Brixton, Land Securities and British Land. The changes to taxation are also demanded by other UK real estate companies like local councils and pension funds.

The legislation has led to deliberate demolition of vacant industrial units and warehouses by the owners to avoid payment of tax.

The legislation, enacted with the objective to generate £1bn in revenue, has caused upheaval in property sector and blocked speculative developments across the UK.

The British Property Federation is worried that many more firms would be led to bankruptcy under tax burden and adverse effects of economic downturn.