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'Stealth tax is rural disaster' End of empty property relief 'huge blow FARM & COUNTRY.

Byline: By ANDREW FORGRAVE Rural Affairs Editor

RURAL diversification is being threatened by a "stealth tax" which is penalising property owners already suffering a credit crunch downturn.

Big property landlords such asMostyn Estates and Powis Castle Estate say the removal of rate relief on empty commercial properties is a potential disaster for rural economies.

Rural estate agents have warned the measure, implemented on April 1, could create derelict sites in the centre of rural villages and in some towns.

Mostyn Estates is already paying pounds 17,000 a year in rates on an empty property in Llandudno that was let to a business which subsequently failed.

"We're having to consider whether we let the property to an unsuitable business, or reduce the rent to uncommercial levels, just to avoid having to pay the business rates," said Mostyn land agent Richard Thomas.

Landowners group CLA Wales says the new tax arrangements are blocking investment in run-down rural buildings.

CLA Wales chairman Ross Murray has been so appalled he has written to Assembly Government ministers. He recently completed a pounds 1.5m rural business centre at Llanover Estate, near Abergavenny, but is now paying rates on the 40% of office space still un-let.

"This has been a huge blow for rural regeneration", he said.

"It will discourage owners of rural buildings from redeveloping.

Parts of rural Wales, where there is limited demand for offices and workplaces, will see investment dry up, and old buildings go into decline. It is a blatant stealth tax."

Speaking at last week's Royal Welsh Show, CLA President Henry Aubrey-Fletcher said the changes exemplified the "law of unintended consequences" having been designed to stop urban developers building up valuable land banks in city centres.

Tom Till, agent for the Powis Castle Estate, said no landlord voluntarily kept commercial property empty if reasonable tenants could be found. He said: "Taxing empty property just kicks us when we are already down and that cannot be right or fair."

Property developer Mel Herman has a portfolio of commercial and residential properties in Conwy, St Asaph, Rhyl and Colwyn Bay. His 40 commercial tenants employ more than 200 people: inevitably some move on as they expand.

The resulting gap in cashflow is now compounded by the "penal"loss of rate relief, he said.

Mr Herman said: "We live in Conwy and we're trying to help the North Wales economy. Conwy and Denbighshire are challenged enough in terms of jobs and it makes me wonder whether the government realises we should be working together through the good and difficult times."


CLA Wales chairman Ross Murray
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Publication:Daily Post (Liverpool, England)
Geographic Code:4EUUK
Date:Jul 29, 2008
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