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Page last updated at 12:32 GMT, Friday, 6 March 2009

Demolition avoids tax

Georg von Harrach
The Politics Show East Midlands


As businesses struggle in the recession, the East Midlands Politics Show has been finding out why some are knocking down their buildings as a way of cutting costs.

The buildings businesses are demolishing because of the recession.

In the height of the property boom it was not just house prices which were going up and up.

The price of commercial property, office space and industrial units was also sky high.

In an attempt to stave off speculative investors, the government introduced a tax on buildings, which had been empty for more than three months.

But then the market began to turn.

Unfair taxes

John Blount, Peter Siddall , Tim Wood
Tim Wood (right) has decided to demolish his empty building

Companies across the region have told the Politics Show that they can no longer find tenants for their buildings but are burdened with a tax they say is unfair.

Tim Wood owns Heritage House in the centre of Derby. It has been empty since last August and it is costing him 2,200 in Empty Property Rate every month.

So, he has called in a demolition company.

A modern building in good condition is being reduced to a pile of rubble.

So is it time for the tax to be abolished?

Exemption from the tax

The Department for Communities told the Politics Show it has listened to the concerns of businesses and is making concessions.

David Cureton  - property consultant
Another building reduced to rubble

From next month empty properties with rateable values less than 15,000 will be exempt from the tax.

But that is not enough for the Royal Institution of Chartered Surveyors (RICS). It is calling for the the tax to be abolished.

"It is purely a revenue raising exercise with no thought of the potential consequences", the RICS says.

However the government says the tax remains an incentive to reuse or resell empty buildings.

Watch the Politics Show in the East Midlands with Marie Ashby at 1200 GMT on Sundays, on BBC One.

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