John Healey, Local Government Minister, announced regulations in Parliament to enable the introduction of reforms to empty property rates on 1 st April.

Announced in the 2007 budget, empty property rates were designed to revitalise run-down communities and ensure the effective and efficient use of buildings. The reforms are to increase the empty property rate from 50% to 100% of the basic occupied business rate, to encourage owners to re-let, re-develop or sell their properties to reduce the need for new development on Greenfield sites; to enable ministers to respond to changing conditions in the property market; to allow for measures to be implemented to tackle deliberate dereliction by ensuring those who deliberately render their property beyond economic repair continue to be liable for empty property rates and to extend the exemption from empty property rates to companies in administration, as well as those in liquidation.

Healey said: “Empty business premises are a blot on the landscape for our most deprived communities, giving a signal to both residents and potential investors to move onto the next town. These changes to empty property rates will encourage owners to keep their premises in use, revitalising deprived areas as new businesses move in bringing much-needed employment opportunities, and making these towns and cities better places in which to live.”

However, the Royal Institute of Chartered Surveyors (RICS) believes there is the potential for a repeat of the situation in the 1970s when an empty rate was introduced in the form of penal rating surcharge. No new lettings were created by the surcharge and it lead to the deliberate vandalising of property, such as removing roofs, in order to avoid rate liability.

RICS would like the Government to pay attention to the recommendations of the Lyons Inquiry and allow for proper consultation on all rate reliefs and exemptions, rather than rushing into reform without considering the adverse effects; postpone changes to the system of empty property rate relief until at least April 2009 and retain empty property relief in the most disadvantaged areas.