Retailers have hit out at the Government over a new tax on empty property, which comes into force today.

Retailers argue that the change ignores the reality of the state of the economy and property market in their desperation to plug holes in the nation’s finances.

The British Retail Consortium (BRC), British Property Federation (BPF), British Centre Association (BCA) and commercial occupiers’ body CoreNet Global have written to local government minister John Healey to say he is ignoring the basic business principle that a property owner needs to lease out their property in order to make their business work. They claim properties are empty because they are not wanted at that time or place and new tax burdens will not change this.

Until today, no business rates were due for the first three months that shops and offices were empty. After that, 50 per cent of the normal rate had to be paid. Today’s rule change will see full rates charged on empty properties after the first three months.

The trade bodies are insisting that if the Government cannot prove its claims that the extra tax will increase property availability and reduce rents, it must reintroduce the 50 per cent relief or extend the period when no rates are due to better reflect the time taken to fill vacant property.

BRC director-general Stephen Robertson said: “The Government must take us for April Fools. It is ignoring the mechanics of the property market because of a desperate need to plug holes in the budget at a time when the economic slowdown makes it more likely business premises will fall vacant. “No one gains by keeping property empty. It’s unoccupied because there isn’t the demand for it at that time and place. Piling on taxes will not conjure up new tenants or drive down rents but will weaken the prospects for local regeneration,” he says.

The changes to the Empty Property Rates Relief were announced by Gordon Brown in March last year, in his final budget as chancellor.

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