Changes to empty property relief rules will reduce rents and increase the competitiveness of the UK, according to ministers. Under new legislation which came into effect this week (1 April), landlords will have to pay rates on empty premises. Until this week, empty commercial property, such as office and retail properties, received 100% relief from paying business rates for the first three months, and were only liable to a 50% rate thereafter. Empty industrial properties, such as warehouses and factories, received a permanent exemption from rates. Empty property relief last year cost £1.3bn. Now, commercial property will be liable for the full business rate after an initial rate-free period of three months, or six months for factories and warehouses. Local government minister, John Healey, said: ‘It is not right that empty properties are subsidised by taxes elsewhere. ‘We can no longer justify offering tax reliefs for buildings to sit empty, subsidised by taxes elsewhere, when UK rents are among highest in the world. ‘Manchester, for example, has higher office occupation costs than Manhattan and Milan, and seven UK cities are in the world's top 20 list for the most expensive office occupation costs.'
