Thursday 27th November 2008

Locate in Kent, the investment promotion agency for Kent and Medway has spoken out about the Chancellor’s changes to empty rates taxation on commercial buildings announced in the pre-Budget report. The agency supports the British Property Federation’s campaign against the taxes and has been lobbying with Kent County Council, local businesses and the Kent Developers Group for the abolition of the rates.

Paul Wookey, Chief Executive of Locate in Kent, said: “While the Chancellor’s empty rates announcement is a move in the right direction, giving relief to tenants and owners of buildings with a rateable below £15,000 will only affect people who own very small properties and this is simply not enough. The average sized industrial property would have a rateable value of at least £40,000, so a large number of firms that require relief will continue to suffer.

“Unfortunately, due to the short-term nature of the relief, it will do nothing to avert demolitions or help much needed investment and regeneration to encourage the development of new small business centres. Also, the change will not help the mainstay of properties in London and the south-east, and we will continue to see firms taxed on their hardship through recession.

“Fundamentally, the change is neither retrospective nor immediate. The Chancellor said the changes will only last for a year as of April 2009. Many property owners may become bankrupt from the rates before next April and it is unlikely that the situation is going to dramatically change over the course of a year. It will also do nothing to encourage companies to invest in property or build speculatively in preparation for the economic upturn and really is an example of too little too late.”

Paul Carter, Leader of Kent County Council, said: “The current economic climate is the perfect opportunity for the government to scrap this taxation which is damaging so many of our businesses. I have been very pleased with the support that our lobby generated, particularly from Kent MPs, but our message is falling on deaf ears. How many more companies need to go out of business before the government changes its mind.”

Local businesses have also been voicing their opinion on the announcements. Mick German, director of MPG Properties, an industrial landlord from Thanet, Kent, said: “The Chancellor’s reform will make no difference to the provision of factories, warehouses and larger offices. Current businesses and ambitious start-up companies will have great difficulty in finding suitable premises as all but the smallest commercial buildings continue to be blighted. Since this legislation came into force last April, property investors have turned their back on constructing new buildings and will now give more serious consideration to demolishing any property without a tenant. Unless the empty rates legislation is repealed in full, nobody in their right mind would want to get involved in investing in business premises. Far from supporting business as the Chancellor claims, he has confirmed a heavy tax on risk-taking and landed a serious blow to business confidence at a time when exactly the opposite is required.”

Tim Daniells, Chairman of Kent Developers Group said: “Business and employment plans for medium and larger size companies will still be adversely affected, and those that are really feeling the financial strain are going to be forced to demolish buildings as a last resort when they can’t meet rate demands on buildings, because they don’t actually have any income from them. This was already a problem before the economic difficulties we are facing, so it doesn’t take a genius to work out it is now becoming a real crisis. Apart from the economic nonsense of having to demolish perfectly good buildings, the environmental impact on our carbon footprint would be significant and a tragedy.”

Locate in Kent intends with its partners in the public and private sectors, to step up the fight against empty property rates.

Source: Locate in Kent

Back to press releases main page