Empty pubs to be hit by rates

Changes to the empty property relief-rate system will come into effect in less than two months. The new bill penalises licensees who close to...

Changes to the empty property relief-rate system will come into effect in less than two months.

The new bill penalises licensees who close to refurbish for more than three months and landlords unable to find tenants.

Under the revised system, starting on 1 April, full business rates apply to commercial property left vacant for more than three months.

But the few pubs in the country with a rateable value of £2,200 or less will pay no business rates at all when not trading.

The Government has moved forward with the plans which were widely criticised by pubcos and property agents. Conservative local Government spokesman Michael Gove also attacked the bill, branding it "a straightforward revenue-raising exercise".

Punch Taverns property and strategy director Nick Griffiths said: "It's very disappointing. If we have empty pubs, that's a problem for us - it's as simple as that.

"A closed pub is of no value to us, so being penalised will be problematic. It may encourage construction vandalism, with landlords tempted to strip properties to reduce rates."

Humberstones' Konrad Szymanski said: "The Chancellor's announcement to remove tax relief on empty properties will inflict added pressure on licensees and developers, who may look for longer, less flexible leases, increased rent levels, or inflated purchase prices to compensate."

The bill is part of a Government initiative to discourage property owners from leaving buildings vacant for prolonged periods.

Minister for Local Government & Community Cohesion Phil Woolas, who published the new measures, said: "No one wants to live or work next to an empty property.

"It's frankly daft for the state to subsidise it when commercial rents are so high."