Empty Property Rates - Minister defends tax (January 13th 2009)
The Minister for Local Government, John Healey, has this week again defended the Government's decision to impose 100% business rates on empty commercial properties in spite of the recession.
Questioned during the debate on the Government's Business Rates Supplements Bill (designed to allow local authorities to a levy a "super rate" on businesses in order to fund infrastructure programmes) the Minister told North Thanet's MP, Roger Gale that:
"Ö.the essential economic case for saying that there should be a liability for business rates on empty property remains and it is this. It is likely to increase the incentive to re-let, re-use or sell empty business properties and therefore also likely to reduce the rents that other businesses pay for the use of their premises"
In response to Gale's suggestion that property owners could find themselves paying a "super-rate" supplement on top of 100% empty property rates the Minister asserted that local authorities would have the power to exempt empty properties from the supplementary rate and added that next year the government would remove the liability to pay rates "on 7 out of ten empty properties".
Commenting on the Ministerís statements Roger Gale, who with South Thanet's Laura Sandys has been campaigning on behalf of the Thanet and East Kent Chamber of Commerce against the empty property tax, says:
"John Healey is simply not living in the world that local businesses inhabit. First, no amount of "incentive" is going to enable owners to let or to sell, in the present economic climate, unoccupied properties. Second, owners are paying the empty property tax now - and have been since last April. To say that they may get some relief next year is too little and too late. Third, the business revaluation due to take place next year (based upon 2008 rents) is likely to mean that fewer businesses will benefit from any relief than the government at present predicts. Fourth, businesses currently occupying premises have signed contracts so that any "reduction in rents" is very unlikely. Finally, who ever heard of a local authority not levying the taxes that it is entitled to claim: strapped for cash, the idea that they will "exempt" empty properties from supplements is improbable.
The fact is that under the proposals contained within this legislation the owner of an empty shop or warehouse could find themselves paying not 100% but 102% in rates during this recession!"