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Government acts to counter vandalism to beat new business rates
Published January 2008
The Government has already acted to prevent property owners from deliberately vandalising their properties to try and avoid the new empty property rates charges, property lawyers at mfg Solicitors are warning.
Partner Cheryl Leyser, head of the firm’s commercial property division, explained: “The Rating (Empty Properties) Act 2007 comes into force on April 1.
“Its main effect is to reduce the exemption from empty property rates. Currently, most empty business properties receive 100 per cent relief for the first three months of vacancy and 50 per cent thereafter. Vacant industrial and listed buildings enjoy 100 per cent relief at all times.”
But from April there will be a three month rate free period for most non-industrial businesses and a six month rate free period for industrial properties – but then rates will have to be paid as if the buildings were fully occupied.
Cheryl Leyser said: “In an economy that is slowing there was some speculation that property owners might resort to vandalising their own properties to try and avoid having to pay.
“But the Government has laid down new anti-avoidance measures to prevent owners from deliberately vandalising their properties to a point where it is not economically reasonable to repair them, or by stripping them down to shell and core, so as to avoid rates liability.”
However, there is some good news for charities and community amateur sports club who have up till now been charged ten per cent of the usual rates bill, or a lesser figure at the local authority’s discretion.
From April 1, these properties will receive 100 per cent relief provided they continue to be occupied by a charity or community amateur sports club.
Small companies occupying premises with a rateable value below £2,200 will also continue to be exempt.
Cheryl Leyser said: “There is still some consultation on how some of the details are to be worked out, but nevertheless the new regime will begin on April 1 and it is essential that all business property owners understand how the changes affect them and that they are both budgeting for them and complying with them.”
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