The Federation of Master Builders (FMB) is calling on the Chancellor of the Exchequer to reintroduce business rate relief on empty commercial property. The removal of the relief from 1 April 2008 is having a detrimental effect on property development and regeneration effectively acting as a break on the re-use, re-development and re-letting of vacant property.
Geoff Lister, President of the FMB, who has written to the Chancellor of the Exchequer, said:
"The negative impact on property development and regeneration includes the recent examples of the demolition of 450,000 square feet of buildings by Segro, the biggest industrial property company in Britain; the demolition of "The Lightning" public house in Ealing and the destruction of sizable sections of the Alexandra Business Park in Sunderland. This unnecessary destruction of property, whilst understandable on the part of the owners, is a disgraceful waste of time, money and resources that is distorting the market by removing rentable properties from it."
Lister continued:
"More alarming is the impact on pensions which are already suffering as a result of the decision to end the 20% dividend tax credit. Many pension funds rely wholly or in part on property portfolios to supply the income required to meet their liabilities. The FMB has received communications from a pension fund that may not be able to meet its obligations due to the new tax liabilities on its property portfolio and is desperately seeking advice. The effect of this tax increase on pension funds is to exacerbate the already considerable loss of income resulting from unoccupied properties."
Lister concluded:
"The Chancellor needs to reverse this policy which is actively damaging the economy at a time when it needs all the support it can get from the Government."
29 August 2008
