'Proposed rates changes will see prices tumble'
COMMERCIAL property values are likely to tumble if proposed reforms to the local government rates legislation goes through, a top agent has warned.
DTZ Sherry FitzGerald say the proposed amendments to section 14 of the Local Government Act will result in rate payers who are responsible for vacant property being entitled to just a 50pc refund in rates compared to the 100pc which can be claimed at the moment.
Under the existing system, when the rates are paid on a vacant commercial property by the owner, they are entitled to claim back a refund equating to one-twelfth the rate for every month the property is unoccupied either for construction, alterations, or because the owner is genuinely unable to obtain a suitable tenant.
However the proposed Local Government Bill 2013 will substituting "one-twenty-fourth" in place of "one-twelfth" cutting the maximum benefit available in half, and that will force prices down, say DTZ.
"It could result in a substantial number of forced sales and possibly in many buildings, particularly industrial properties, being deliberately deconstructed so that they qualify as being "incapable of beneficial occupation" and would therefore escape any rates liability," say the firm.
A similar situation arose between the 1950s and 70s, when many large vacant rural houses had their roofs removed in order to escape liability before the abolition of rates.