Tax relief scrap KOs regeneration

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The scrapping of tax relief on empty commercial property is undermining renewal efforts, the leader of the umbrella groups for England's urban regeneration companies warned today.

John Nicholls, chairman of the urban regeneration companies (URCs) chief executives group, told the 'Today' programme this morning that owners are demolishing empty buildings to avoid paying the tax introduced in the most recent budget, leaving parts of the country "resembling bomb sites".

Regeneration projects had been rendered unworkable, threatening jobs and new homes, said Mr Nicholls, who is also chief executive of the Leicester Regeneration Company.

Some developers are simply leaving sites unfinished rather than risk liability for the tax.
 
Before the srecent rule change in this year's Budget, vacant offices and shops received rate relief of 50% and industrial units gained full relief.

Now all unused commercial property has to pay full business rates after a three-month period of grace for commercial premises and six months for industrial property and warehouses.
 
Mr  Nicholls said: "This isn't just a problem for the development and property industries, important though they are, it's really impacting on the business of urban regeneration and also to point out that it's not all about demolitions.
 
"This is starting to affect the supply of much needed new property and job-generating property in our urban areas."
 
When they (developers) are assembling sites – which is often a long and painstaking business in urban areas – they might be liable for empty rates on the bits they've accumulated, so what they're doing is to demolish those properties."
 
"There are URCs across the country – 20 of us – and some of my fellow chief executives in Bradford, Sunderland, Swindon, as well as here in Leicester, all report this sort of thing happening.
 
"Part of the problem is lack of clear figures about the effects, but given this brings in about £1bn Treasury isn't going to change its mind based on anecdote." He called for a quantuitative assessment of the impact of the scrapping of the relief.