Home Commercial Property Westminster hardest hit as empty properties cost landlords £1bn

Westminster hardest hit as empty properties cost landlords £1bn

by Deleted Subscriber Content
9th Apr 13 12:18 pm

Business rates on empty buildings forced landlords to fork out a staggering £1.1bn in taxes last year, it has emerged.

This represents a 19% hike on the previous year, according to figures obtained by the Taxpayers’ Alliance and published today.

London was especially hard hit, but Westminster – London’s wealthiest borough – paid the most empty rate tax, some £100.7m.

Tower Hamlet was the next highest, but paid out just £18.3m.

TPA chief executive Matthew Sinclair slammed the findings as an “unnecessary burden” on landlords. He said that the tax hike was encouraging more demolitions, which was putting the investment of smaller landlords at risk and harming pensioners who had invested in commercial real estate and expected steady returns.

However, while many, including Business Secretary Vince Cable, have previously questioned the logic of taxing empty retail during a recession, Westminster’s disproportionate empty rate does raise eyebrows that wealthier landlords in the area may simply be charging overly expensive rents.

But TPA dispute the notion, insisting that irrespective of rental rates, taxes on empty commercial spots act as barriers to growth across the spectrum.

“Regardless of whether it is the most expensive you are not getting any rent so it makes it difficult to do anything with that property,” Robert Oxley, TPA campaign manager told LondonlovesBusiness.com.

“This acts as a barrier to economic growth.”

Instead, more tax reliefs, like those promoting pop-up stores should be enacted and the six-month vacancy grace period restored, he explained.

“If we want to solve the high rent situation then we need to be building more,” Oxley added.

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