Bombsite Britain tax on the Olympic Park shows why empty rates must be scrapped

The ridiculousness of empty property rates came into sharp focus this week after I revealed that the Olympic Park has an £18m liability to the "Bombsite Britain" tax.

The charge would be the largest in the history of the tax since it was introduced in 1966.

Luckily it looks like the London Legacy Development Corporation might successfully be able to reduce its liability.

It is holding talks with the Valuation Office Agency over paying rates only on the likes of the construction cabins while a £292m redevelopment takes place over the next 18 months.

But developers and landlords are not always so lucky.

According to Lambert Smith Hampton's national head of rating, Richard Wackett, most redevelopments still incur charges for areas that are considered "capable of use" effectively meaning areas that aren't having work done during a project, you still pay for.

The Olympic Park was given its £37.5m rateable value prior to the Olympics.

Questions will be asked as to why it was deemed rateable in the first place given that it would close again six weeks later for its revamp.

As Knight Frank's head of business rates Keith Cooney put it: "The Park had a functional obsolescence built in which would seem to render it incapable of being let under the assumed rating criteria of a year to year tenancy with a prospect of continuance.

"If the Park was rateable over such a short period then why were the other sites not also rated like the beach volleyball in Horse Guards Parade or the horse trials in Greenwich."

But the key issue here has to be that given the financial crisis of recent years, how can the Government still be levying a tax that is such a blatant hindrance on growth and development.

Empty property rates have earned the nickname the Bombsite Britain tax after forcing landlords to flatten thousands of empty buildings to avoid paying it.

The tax is a blight on regeneration charging landlords for simply owning a vacant property.

Nobody wants to own a vacant property. The money spent on the tax could be spent on redevelopment instead.

But there is hope.

Four recommendations to make empty rates more business friendly have been passed to the Treasury by a working group of MPs tasked with providing evidence of the damaging effects of the tax.

Ministers are now weighing up whether to adopt the recommendations ahead of a potential announcement in the Autumn Statement on 5 December.

Everyone in the property industry should be crossing their fingers and toes...