Commercial property owners in the UK ended up having to fork out £1.1 billion on rental rates for empty properties, according to new data released by the TaxPayers’ Alliance.
The tax changes had been introduced in the 2007 Budget, stating that business relief was limited for properties that had no tenants in them.
The new study revealed that this figure had been a rise of 19 per cent, compared to the previous year. Scottish investors suffered badly, with landlords having to pay £39.9 million on the tax. This news comes in conjunction with the Scottish Government cutting relief by £36 million in the region this month. Property owners have been left with bills that they cannot afford, especially older investors who believed that a small unit would be a great way to improve their future pension. Property owners in Wales meanwhile had to pay £29.6 million on empty sites.
Labour leader Ed Milliband announced last week that councils across the UK should have a tighter control on high streets. In a statement, Mr Milliband said: “Currently if a bank branch closes down, there’s nothing a council can do if a payday loan shop wants to move in and open up in the same place, even if there’s another lender next door. That can’t be right.”
Other analysts have suggested that this “ugly tax” has caused a vicious cycle that will prevent any economic growth. Matthew Sinclair of the Taxpayers’ Alliance said: “It is extremely unfair that property owners are being hit with enormous business rates on properties which are empty, with no rent coming in that they can use to pay the bill.
“The rest of us lose out as the mere threat of having to pay rates on empty properties is discouraging people from putting money into new developments, which is undermining the prospects for economic growth.”
The UK government is currently considering passing legislation that will allow empty space to be converted into residential properties without any planning permission being needed.