Do local authority business rates help property prices?

[diyhelp]

Every year the council tax/local authority business rates seem to go up and up when very often services are being consolidated and in some cases removed. This begs the question; do local authority business rates help property prices?

 

[SteveK]

Business rates do not change very frequently, usually every 5 years.

In terms of impact on property prices, if rates increase and makes the business unprofitable then you'll find more empty shops on high street.

If a commercial property is empty then owner is still required to pay business rates so you will find them selling up sometimes at bargain prices to avoid this cost if there is little hope of finding a tenant soon.

 

[FWL]

I always thought that investors with an empty commercial property could apply for an exemption from business rates? I think it would only be a short term exemption but every little helps

 

[SteveK]

Yes there is a 3 month exemption. However, if you buy an empty property which has been empty for 3 months the time is not reset.

 

[FWL]

Surely as commercial services are cut (or businesses forced to pay some services separately) by local councils across the UK there should be a reduction in business rates? After all, business rates were brought in to cover the cost of local services. My personal opinion is that local authorities have mismanaged revenues for many years now and it is businesses and taxpayers which bail them out time and time again.

 

[realdeals]

It is always the same, when politicians want to raise more money but keep voters onside they simply increase the cost of running a business. People forget that businesses collect taxes for the government “free of charge” and while talk of a minimum wage and a living wage is great in theory, in practice not all businesses can afford this. A buoyant business sector brings in an array of different benefits which will all benefit the local housing market.

 

[Longterminvestor]

Local authorities are in a difficult situation - do they retain current business rates and kill the high street, but have enough funding for local services in the short term, or do they reduce business rates in the hope this will lead to growth in the local economy (and improved long term tax income) but struggle to find the funding for local services now.

In my view the internet has killed the high street, not just for retail outlets but also service businesses. Do people really need an expensive high street main office now or just a token gesture cheap office away from the main street?