Released on: July 14, 2008, 4:18 am

Press Release Author: NovaLoca

Industry: Real Estate

Press Release Summary: The new requirement to pay full business rates on empty
commercial property is having a startling effect across the commercial property
market. What has been happening and what could be done about it?

Press Release Body: The introduction of full business rates for empty commercial
property is having a dramatic effect. In some cases property owners are even
resorting to demolition of empty buildings to avoid the extra tax burden they would
otherwise face under the new legislation, which came into force in April 2008. What
does this mean for you and the commercial property you are marketing?

Empty industrial properties are now liable for full business rates after six months,
whilst vacant office spaces and retail units become liable after just three months.
The reform aims to encourage landlords to refurbish properties where necessary so
they can re-let or sell their vacant commercial units boosting the supply and in
turn reducing rental costs. It has provoked a storm of criticism from the commercial
property industry, which believes it may have the opposite effect, discouraging
speculative development and damaging flexibility and competitiveness.

Demolition is clearly a last resort. But as one landlord commented, "If we hadn't
had to pay rates on it, we wouldn't have knocked it down." If no tenant or purchaser
can be found, this is the only way to avoid the increased tax cost. Secondary
legislation is under consideration to combat avoidance measures, such as deliberate
damage to buildings to render them unusable and remove them from the ratings list.
Fears are growing that attractive, non-listed buildings will be demolished purely to
avoid tax - a move that would never have been considered before the new legislation
took effect. There is concern, too, that newly established businesses will struggle
to find their first commercial premises if lower-cost buildings become scarce as a
result of demolitions and refurbishments.

RICS commented long before the reform was introduced that it could lead to instances
of deliberate damage as well as higher service charges, increased dilapidation
claims and more rating appeals. "This is a repeat of the situation in the 1970s,
when an empty rate was introduced in the form of penal rating surcharge. However, it
didn\'t create new lettings and led to the deliberate vandalising of property to
avoid rate liability," the institution noted.

The emphasis should be on finding tenants for your commercial property to avoid such
drastic measures as demolition. NovaLoca is a commercial property online listings
service which can market your empty property to fifty thousands of clients at the
click of a mouse. To find out how they could help you fill your commercial property
please visit NovaLoca.com or call 0845 094 7902.


Web Site: http://www.novaloca.com

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