Commercial property owners are conducting pre-emptive demolitions of empty buildings to avoid paying tax, it has been revealed.
The government recently ended the tax relief on empty industrial property in a bid to encourage landlords to rent office space.
However, while the demolitions could eventually make way for new offices in environmentally-friendly buildings, the pre-emptive demolitions are putting regeneration at risk in some areas.
According to John Nicholls, chief executive of the Urban Regeneration Companies, the trend is threatening “the supply of new property”.
He told the BBC: “Projects are being shelved because of the risk of having to pay rates on the finished product if there isn’t a tenant signed up.”
The relief on empty offices to rent ended on April 1st 2008.
Landlords were previously granted a three month exemption from the tax and a 50 per cent reduction following that.