The Rating (Empty Properties) Act 2007 came into force in April 2008. Prior to this empty industrial property had 100 per cent relief from business rates however long vacant; empty office and retail premises enjoyed three months exemption after which 50 per cent of the rates were payable. The new Act has changed the system so that for office and retail the full 100 per cent rates become payable after three months; likewise for industrial property after six months the full rates are then due.
The Government claimed the measure was intended to stimulate regeneration and bring back onto the market property that might otherwise lie vacant. However, there is evidence that it has had the opposite effect. Empty buildings that are the subject of regeneration and whose redevelopment is going through the planning process are being demolished. The owners do this to avoid rates bills running into thousands of pounds. This increases the cost of regeneration. Furthermore, the new levy acts as a disincentive to any speculative development. Speculation carries risk but the possibility that a developer may have to bear the rates bill for empty units increases this. The Conservative Opposition has tabled questions in Parliament on the topic after the leaders of England's 19 urban regeneration companies criticised the tax.
The Act can be viewed here.