Following the announcement that £1.1 billion was paid in 2011 in business rates on empty properties, the Royal Institution of Chartered Surveyors (RICS) has urged the Government to change the way that the charges work.

Figures obtained by the Taxpayers’ Alliance (TPA) detailed how much local authorities have collected in empty property rates (EPR) across the country.

£1.1 billion was paid in EPR in 2011-12, representing an increase of 19 per cent since the tax years commencing in 2009.

City of Westminster property owners paid the most in London and the most of any local authority, footing a £100.7 million bill – a figure that is more than five times the next highest in London (Tower Hamlets, £18.3 million).

Those holding onto empty properties in Basildon paid £6.7 million in the same period, recording the highest rates in the East of England.

Property owners in Northampton were discovered to have paid the highest rates in the East Midlands, recording £7.8 billion of rates.

Empty premises in Daventry cost the most per head of population, however, with EPR levying £50 per person – more than one tenth of the total business rates paid in the area.

Though empty industrial properties have been historically exempt from EPR, the 2007 Budget introduced full rates payable on all empty commercial premises, with properties worth below £18,000 given some relief in 2010.

The TAP has warned that such rates were placing an unfair burden on landlords struggling to find tenants in the current economic downturn, prompting the demolition of hundreds of properties so that such fees could be avoided.

A RICS questionnaire in November 2012 aimed to discern the effect of business rates on empty property across its membership.

92 per cent of those questioned viewed EPR as a barrier to town centre regeneration, while 89 per cent of members felt that the policy was restrictive to overall economic growth.

EPR was described as a “significant deterrent” for speculative building by 88 per cent of those surveyed.

Though the Government announced the introduction of further exemptions for new build properties in its most recent Autumn Statement, RICS has demanded further commitment regarding the new definition of EPR.

The Institution’s recent study into the rates has recommended that the following steps are undertaken:

• Introduce a national 12 month exemption from EPR for new builds;
• Increase exemption from EPR for retail spaces from three to six months;
• Increase exemption from EPR for office and industrial space from six to 12 months;
• Remove all refurbishment, renovation or retrofitting projects from the business rate list until completion;
• Increase the threshold for empty property relief to between £12,000 and £18,000; and
• Devolve EPR relief allocation to Local Authorities and Local Enterprise Partnerships as part of the localisation of business rates.