The commercial property industry yesterday rounded on Gordon Brown's new "stealth taxes" on the sector. Although Mr Brown did not put up stamp duty, as some had feared, the withdrawal of property tax benefits announced yesterday would raise more than [pound]1.3bn annually for the Treasury by the 2009/10 year.
The Chancellor removed tax relief on empty commercial property and he also cut tax benefits from expenditure on industrial buildings. Angus McIntosh, a partner at the property advisers King Sturge, said: "There is no market evidence that properties are deliberately left empty, and by being empty push up rent levels. This is yet another unwelcome stealth tax on the property market.
"Yet again the Chancellor has increased the tax take from the property sector. This stealth tax is bad for GB Ltd - at a time when stock markets around the world are not delivering reliable returns, increasingly Joe & Joanna Public are depending on Pension Funds to invest in property. A property tax is a tax on their pension funds."
Mr Brown said he was trying to "encourage better use of commercial property" by removing the tax relief on premises that are kept empty. He believes that unused property holds back the regeneration of areas and that removing tax benefits will encourage owners to let or sell it.
Currently, industrial property qualifies for relief from business rates indefinitely. In future, this will be restricted to six months. For empty retail property and offices, relief will now be limited to three months.
Graham Beaumont, also of King Sturge, said owners of factories may now deliberately damage their own properties so that it cannot be argued that they could be put to use - for instance by removing roofs. …