THE North-East risks losing out
on investment from developers
with the introduction of taxes on
industrial and commercial property,
an industry expert has
warned.
From April 1, changes in the
law mean that owners of empty
industrial properties will be
given total rate relief for only six
months - instead of the previous
indefinite period of time - and
commercial property will be exempt
for only three months. Previously,
after that time period,
owners would only have to pay
half the full amount of an occupied
property.
David Wood, regional chairman
of both the Institution of
Civil Engineers North-East and
Constructing North- East, said
that regeneration in the region
could be threatened by the new
rules, which the Government expects
to generate an extra £950m
in the 2008-9 tax year.
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Mr Wood, who is also regional
managing director of consultant
firm White Young Green, said the
company is looking to relocate to
larger premises in Newcastle, but
would not be prepared to commit
to an un-built property under the
new rules.
"The North-East is striving to
move its economy forward and
encourage investment from the
private sector," he said.
"Developers already know that
the returns they can get here are
less than in other parts of the
country.
"Any measure, such as the one
introduced next month, threatens to discourage investment,
and that cannot be good news."
Mr Wood said that companies
decide what to charge for services
and products years in advance,
and increases in overhead
costs will force them to bear the
brunt of any extra tax burdens in
the interim period.
"Carrying an increased burden
of overheads will directly impact
on the development of commercial
property and will reduce the
willingness of the private sector
to make speculative investment
in improving the built environment
within the region," he said.
Mr Wood added that more
could be done by calling for
Chancellor Alistair Darling to
link rates to the environmentally-
friendly credentials of new
buildings.
He said: "I think an opportunity
has been missed to incentivise
developers to take a responsible
view on reducing the impact of
new buildings on the environment
and encouraging them to
develop carbon neutral buildings
by linking reduced rates charges
of buildings with low carbon
footprints.
"It seems the property industry
is being dealt a double blow,
with higher costs to achieve sustainable
developments and higher
rates charges during the period
that they seek to rent or sell
the properties they develop."
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