Demolition Offers Building Owners Relief

In an attempt to save a bit of cash, developers are seemingly exploiting a loop hole in the rates law.

If a building is demolished then rates can not be applied. Business rate relief on empty commercial property was removed on 1 April 2008. Before this, empty retail and office space received full relief for three months and 50% thereafter, while industrial space (warehouses and factories) received full relief permanently.

John Nicholls, chair of a leaders group of the government’s 19 urban regeneration companies, said the Empty Rates tax was having a “very significant” effect on regeneration areas.
Nicholls spoke to Building after it emerged that the URCs leaders had written to the Treasury last year urging them not to introduce the tax, and predicting it would lead to unnecessary demolitions and damage development viability.

Nicholls said: “It seems to be having exactly the effect we predicted. The pre-emptive demolition isn’t actually the main problem. Most worrying is the fact it deters development and suppresses speculative building – which is just what regeneration areas need.”

Until any change is made, consider investing in a demolition ball..