Empty property, empty pockets!

News

01 February, 2008

"Reduced business rates on empty properties are to be abolished from April 2008 and will have a significant effect on Commercial Landlords", warns Tim Hollingsworth Commercial Property Specialist at Forbes Solicitors.

"Currently while a property is empty no business rates are payable for the first three months and after that the property enjoys 50% relief until it is re-occupied. In the case of industrial buildings, listed buildings and small properties with rateable values of less than £2,200 there are no rates to pay even after the first three months.

The implementation of the Rating (Empty Properties) Act 2007 on 1 April 2008 means the full business rate will be payable on empty properties after three months and after six months for empty industrial and warehouse property.

This will inevitably mean that owners of large commercial property portfolios will need to look carefully at the number of unoccupied properties they hold. The increased cost of retaining such properties may well mean there will be an increasing number of commercial properties on the market.

Landlords should also look at their existing leases to see what provisions they contain to recover loss of rating relief when a tenant has left before the end of the contractual term. Future leases will need to ensure that this is covered."

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