TAXES on empty commercial properties are crippling hopes of recovery, it is claimed.

A survey by the Royal Institution of Chartered Surveyors showed that almost 90% of members in the north of England believe that charges placed on shops and offices are significantly undermining the region’s economic recovery.

When commercial premises such as a shop or an office become vacant, the owner is not required to pay business rates for three months.

However, after this period, these charges – known as Empty Property Rates – are applicable at the full rate, leaving many with a tax bill which they have no means of funding.

More than two-thirds of respondents in England and Wales claimed that commercial property floor space is currently vacant for periods of more than six months, meaning that the problem of unmanageable taxes is widespread at a time when businesses are most stretched.

Business rates collected from ratepayers are initially acquired by central government and then redistributed back to local authorities as part of the Local Government Finance Settlement. These funds then contribute towards financing local services.

With the economy situation continuing to impact so significantly on towns across the north of England, the RICS said the knock-on effect was also being felt in capital values. Some 80% of respondents believe that the price of retail premises will decrease as a direct result of EPR.

The RICS said it would like to see changes made in the government’s Autumn Statement tomorrow to extend the exemption time for commercial property owners.

This would mean that should a retail property owner lose their tenant, no charges would be applicable for six, rather than three, months. This would be extended to 12 months for owners of harder to let property, such as offices and industrial units.

Richard Wackett, head of rating for property consultancy Lambert Smith Hampton, said: “The charges that property owners are facing are having a detrimental effect on many businesses.

“If the government takes the initiative in the Autumn Statement to offer property owners a longer exemption period, this would give commercial landlords some much-needed breathing space and contribute towards getting the business sector moving again.”

The RIC said that 89% of respondents believe EPR restricts economic growth and 88% considered it a significant deterrent for speculative building.