From today there will be no tax relief on empty commercial buildings.

Today (1 April) sees the end of Empty Property Relief for vacant commercial and industrial properties in the UK, a decision controversially received by the property industry, who are making a last-ditch effort to persuade the government to reverse this £1.3bn ($2.6bn) tax.

Owners of industrial property used to obtain 100% rate relief when buildings are unoccupied. Owners of other commercial property, shops and offices used to obtain 100% relief for the first three months and 50% relief after that.

However, from today, industrial property owners will obtain 100% relief for only the first six months that a building is vacant. All other empty commercial properties would have three months’ rates relief and then incur the full amount. The changes are retrospective; meaning premises empty beyond the prescribed time limits from today will incur rates at the full amount.

The obligation to pay rates passes to a tenant, meaning retailers who take longer than three months to finish any refurbishment risk paying rates before they have reopened for trading.

The British Chamber of Commerce has joined a united call from the British Property Federation (BPF), the British Retail Consortium (BRC), the Confederation of British Industry (CBI) and the Business Centre Association urging for the laws to be dropped or at the very least postponed.

“Properties are empty because there is no demand for them at a particular time or place … extra tax burdens will do nothing to change that,” the group said in a joint letter.

Commenting on the removal of the relief, David Frost, Director General of the British Chambers of Commerce, said: “We are very concerned that removing tax relief on empty buildings will act as a brake on regeneration in many of the country’s most deprived areas.

“The relief was an incentive for businesses to bring empty commercial and industrial property back into use and it has benefited many of the poorest communities. 

“At a stroke, the government’s new policy will hit disadvantaged areas and create financial insecurity for companies currently in possession of empty properties. This is little more than another tax hike on business.”