Wednesday, 13 August 2008

Commercial property owners are knocking the empty ones down

Back in April the government cancelled some rather important tax breaks. If a commercial building was unoccupied the owner used to get a 50 percent discount on the rates for retail and office space, and a 100 percent discount on industrial premises. Since April 1st these discounts have been limited to the first three months (six months for industrial property) of vacancy.

So of course empty buildings become major liabilities and owners take the obvious way out and demolish them. This week, the industrial landlord O&H started demolishing a fifth of its Alexandra Business Park, Sunderland, and last week gave approval to demolish a further 37,000ft of the 750,000ft park. (Link)

This is dire news. We are in an economic downturn and many buildings will be unused until the cycle turns and growth resumes. But if they have been demolished in the meantime growth will engender reconstruction costs and be so much slower; all to avoid a tax now. Better surely to give the tax break so empty offices, retail units and factories will exist to be grown into when the good times return. Such short-sightedness is classic New Labour.

1 comment:

Anonymous said...

What an earth makes you think that "good times will return"?