Property entrepreneurs warned of changes in the law

4:09pm Friday 28th March 2008

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COMMERCIAL property consultants Robert Pinkus & Co. are warning local property owners and entrepreneurs to key changes in the law that could leave them seriously out of pocket.

On April 1 this year, the government is changing the rules on empty and unoccupied business properties under The Rating (Empty Property) Act 2007. Currently all empty retail and office accommodation benefit from a three months exemption period, followed by 50 per cent of the rates due until the property is re-occupied. Industrial properties are currently 100 per cent exempt from charges whilst unoccupied.

The new legislation means business property owners will now be charged full rates for any property unoccupied for a period longer than three months. Under the new laws retail and office accommodation will be liable for full rates after the first three months and industrial properties will be liable for full rates after the first six months.

Joe Assalone, Partner at Robert Pinkus & Co. said: "The proposed changes to legislation will dramatically alter the way in which commercial property is handled, whether it's a new development, a private sale or a letting. "Anyone with a commercial property interest will want to ensure that they are not paying unnecessary taxes on empty property for long periods of time. "For a small independent property owner, being left with an empty property unnecessarily could have a drastic effect on the cash flow for that investment and a direct impact on bottom line profitability."

"Property managers will need to adopt more flexible, long term solutions that will encourage maximum occupancy rates and stable costs in a changing business environment," he added.

The looming new legislation is also already having an impact on how investors are looking at speculative builds in and around the County, and industry experts are predicting a temporary downturn in speculative building developments across Lancashire over the next couple of years. Investors will have to approach development opportunities more cautiously as the new tax rates have the potential to drain returns out of a development if the owner/occupiers are not in place ready to move in on completion of the build.

More information about the changes to law can be found at the Robert Pinkus & Co. home page at www.pinkus.co.uk or by calling Joe Assalone on 01772 769000.