George Osborne has agreed to review empty rates legislation on the back of an Estates Gazette investigation that showed government spends more than £50m a year on the tax.
York Outer MP Julian Sturdy met with the chancellor of the Exchequer this week to show EG’s data on the cost of empty rates to the public purse and present the case for changing the law to help struggling businesses.
Osborne has asked Sturdy to form a working group with six other MPs to produce proposals for how the empty rates regime could be changed.
Proposals are expected to include a three-year exemption from rates for new development to encourage regeneration and full rate relief for low-rateable-value properties, which are typically occupied by struggling smaller businesses.
A study commissioned by the Welsh government recommended a similar proposal for new-builds last month (14 April, p41).
The new working group is also expected to press for a full impact assessment of empty rates on the property industry and wider economy.
Sturdy said: “The chancellor was extremely helpful, and all members present will now form a small working group to develop some [empty rates] proposals moving forwards.”
Workspace Group operations director Chris Pieroni praised the review decision.
He said: “Our ability to invest in flexible space, which small businesses need to grow and lead the economy out of recession, is being constrained by this tax. We look forward to seeing changes come forward.”
British Property Federation chief executive Liz Peace added: “It is welcome that the government is finally willing to examine the damage that empty property rates have caused the property industry and the wider economy.
“While its hands are tied somewhat by the economic situation, there are a few targeted reliefs it could introduce.”
EG’s exclusive research, carried out through a freedom of information request to all UK local authorities and government departments, revealed for the first time the burden of empty rates on the taxpayer and struggling councils (17 March, p39).
The figures showed that the tax had cost central and local government £50m over the past 12 months on their own vacant properties, and they expected that amount to rise to £70m for 2012-13.
