The British Property Federation (BPF) has welcomed the publication of an independent report calling for the Government’s tax on empty properties to be scrapped. In a paper published yesterday, the Tax Payers’ Alliance called on Chancellor of the Exchequer George Osborne to stop charging full business rates on empty commercial property.

The report reveals that empty property rates will hinder a private-sector led economic recovery. Last year, empty rate relief was worth £1.2bn to businesses.

The so-called ‘bombsite Britain’ tax has caused landlords to demolish empty properties instead of paying the new rates. This will contract the fixed capital stock and make recovery more difficult say the BPF. It added that the tax has badly hit many pensioners who are funding their retirement with rental income from a small number of commercial properties.

BPF chief executive Liz Peace said: “The property industry welcomes the publication of this timely report, which reinforces much of what we have said about this economically destructive tax.

“It is now clear that charging Empty Property Rates is an unfair burden on tax-payers that is restricting economic growth, and has caused millions of square feet of perfectly usable business space to be demolished.

“Government claims to be serious about allowing businesses to drive the UK’s recovery, but hiking tax on empty properties threatens to scupper many firms’ ability to grow.

“We would urge ministers – many of whom were so critical of the tax in opposition – to scrap this enemy of enterprise in this week’s Budget.”