1. Stamp Duty Reserve Tax (virt-x Exchange Limited) (Amendment) Regulations 2008
Number: 2008/914Enabling power: Finance Act 1991
Commencement: 18 April 2008
Summary: Amend the Stamp Duty Reserve Tax (virt-x Exchange Limited) Regulations 1995 (SI 1995/2051). The purpose of the amendments is to reflect the change of name of virt-x Exchange Limited to SWX Europe Limited.
Back to top2. Town and Country Planning (Fees for Applications and Deemed Applications) (Amendment) (England) Regulations 2008
Number: 2008/958Enabling power: Town and Country Planning Act 1990
Commencement: 6 April 2008
Summary: Amend the Town and Country Planning (Fees for Applications and Deemed Applications) Regulations 1989 to increase certain fees payable under those Regulations.
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Features
1. The battle of heritage versus regeneration
The registration of buildings in old industrialised cities such as Liverpool and Manchester could frustrate much-needed regeneration projects.English Heritage, the government’s adviser on historic buildings and monuments, said it is focusing on industrial buildings in Liverpool and Manchester to identify potential listed buildings, such as warehouses, that it says are currently underrepresented on the register.
Chad Sutton, a planning solicitor at City law firm Trowers & Hamlins said: "Nobody can dispute the need to preserve examples of England’s industrial heritage. However, it is essential that limitations placed on the development of these buildings do not bring entire regeneration projects grinding to a halt."
Figures gathered from English Heritage by Trowers & Hamlins reveal that during 2007, 514 buildings were added to the 376,000 already on the listed building register, an increase of 90 per cent on the previous year.
“English Heritage has a difficult challenge in identifying examples of buildings currently underrepresented on the listed building register without losing sight of the significant obstacles listing can pose for developers and homeowners alike," said Mr Sutton.
"Often buildings are granted listed status only when plans to redevelop a property have started to evolve. The limitations that this places on developers can mean that they are forced to pull the plug on the entire project," he added.
Mr Sutton gave a recent example of how plans to redevelop a former homeopathic hospital in Liverpool resulted in the building being granted Grade II*[1] listed status. He said that the restrictions now placed in the way of redevelopment plans and the increased costs for the developer should the project be granted listed building consent could make the project unviable for developers.
Figures taken from English Heritage also show that there was a 36 per cent increase in the number of buildings de-listed last year, from 98 in 2006 to 133 in 2007. According to the law firm, this reflects the growing number of applications submitted by property owners to have their property removed from English Heritage’s register.
"Being in possession of a listed building can place an onerous burden on both homeowners and developers who are unable to make alterations without seeking listed building consent beforehand," said Mr Sutton.
"There are also considerable cost issues for homeowners. The local authority or English Heritage may ask for substantial changes to be made to the plans, which can add to the cost of making much needed alterations. Also the cost of making ordinary repairs can soar as they may require special care while at the same time property owners can face legal action for failing to maintain their property," he said.
"While it is essential that the best of England’s architectural heritage is preserved, a measure approach towards listing buildings must be maintained," he added.
(2/4/08)
Back to top 2. End of an era for empty property reliefs
New measures under the Local Government (Non-Domestic Rating) (Consequential Amendments) (England) Order 2008 change the empty property reliefs regime.At present, most empty commercial property receives a 100 per cent relief from taxation for the first three months and 50 per cent thereafter; and empty warehouses and factories receive a permanent exemption from rates. However, from 1 April empty commercial property will be liable for the full business rate after an initial rate-free period of three months or six months for factories and warehouses. Charities, community amateur sports clubs and companies in administration will be granted complete exemption.
Local Government Minister John Healey said that changes to the out of date system of relief remove perverse incentives to keep buildings empty and encourage owners to bring them back into use. Developers argue that leaving buildings incomplete helps them save money if they fear they can no longer find tenants for a planned building by the time it is built.
Barrister Guy Roots, general editor of Ryde on Rating and the Council Tax Service, said: "Back in the 1970s, the then Labour government tried to have a go at property developers who (so the government alleged) were keeping property empty awaiting capital gain without putting the property to use. Inevitably, the legislation caught the people who were bona fide trying to find occupiers as well as the developers who were intentionally keeping property empty.
"That legislation was dismantled by the Thatcher government and a system put in place whereby empty property was exempt for three months after which half rates were charged. That system has continued up to now, but from 1 April 2008, empty property will have to pay full non-domestic rates. This was recommended some time ago in the Lyons report on Local government finance, but recently, as the implementation date approached, it has become very contentious."
A report by CBRE (Global Market Rents, November 2007) found that the amount, by value, of empty property in the City of London has doubled since 1999 – up to 16 per cent in 2004-05. Other English towns and cities, like Manchester, Birmingham and Slough, faced similar problems with up to nearly a fifth of all commercial properties empty in the same period.
The Treasury expects the cuts to generate an extra £950 million in the 2008-09 tax year and £900 million the year after.
"The Treasury thinks that this is a good way of collecting more money," said Mr Roots, "but it is very short sighted. It is essential to our economy that offices, shops, etc, should be available when businesses require them, but the rating of empty property is a significant disincentive to developers to build speculatively without having an occupier tied up.”
Mr Roots added: "The proposal was devised when the economy was thriving, but since then, the economy has taken a dive; developers and property investors are not surprisingly squealing at the prospect of significantly greater outgoings at a time when it will be more difficult to find occupiers."
The government expects that the risk of avoidance activity will be low. Healey says that it would be an extreme step for property owners to deliberately vandalise their asset. He says that he will not tolerate any deliberate dereliction and will act on new anti-avoidance measures if necessary.
(1/4/08)
Back to topArticles
1. A transparent tax?
Journal: Tax Journal
Citation: Issue 930, 17
Issue date: 21 April 2008
Author: Euan Sutherland
Summary: Examines the Finance Bill 2008 amendments to the SDLT partnership rules
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2. Sustainable demand
Journal: Estates Gazette
Citation: 12 April 2008, 96
Issue date: 12 April 2008
Author: Garry Brett
Summary: States that green leases will become increasingly necessary as the environmental agenda becomes mainstream. If sustainability and energy reduction are to be our focus in the future, buildings and legal documents will need to change.
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3. The land of make-believe
Journal: Building
Citation: 11 April 2008, 64
Issue date: 11 April 2008
Author: Tony Bingham
Summary: Asserts the building industry should take notice of the McCartney/Mills divorce settlement. Highlights similarities between the case and many building disputes. It's quite normal for one witness to swear blind to an avenet happening and another to swear it never did.
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4. Seeing red not green
Journal: Estates Gazette
Citation: 5 April 2008, 75
Issue date: 5 April 2008
Author: Helen McCormick
Summary: Investigates why the selection process for eco-towns has raised protests from all sides.
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5. The Consumers, Estate Agents and Redress Act 2007
Journal: EMIS Property Service
Citation: (2008) 5 EMIS Property Service 4, 12
Issue date: 4 April 2008
Author: Leon Swerling
Relevant legislation: Consumers, Estate Agents and Redress Act 2007
Summary: States that buyers and sellers have been given more powers to complain and obtain compensation. There is now a mandatory ombudsman scheme. To date only about 60% of estate agents have been members of such a scheme. There are also going to be wide obligations regarding record-keeping.
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6. Golden opportunity
Journal: Solicitors Journal
Citation: 152 SJ 12, 9
Issue date: 3 April 2008
Author: Peter Morgan
Summary: Examines why HIPs are a great opportunity for solicitors to turn the tables on estate agents. Asserts that HIPs represent the biggest threat ever seen to solicitors' hold on the conveyancing market, but also the biggest opportunity. Claims HIPs enable solicitors to reach clients before estate agents and financial advisers. Suggests solicitors prepare and market HIPs in order to stop the erosion of their core work.
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This e-alert is not intended to provide comprehensive records of information concerning the property sector. If you have any feedback or suggestions, please email propertysection@lawsociety.org.uk. This e-alert was created in conjunction with LexisNexis UK Legal Updater Service. For further information about any of the articles, please contact claire.melvin@lexisnexis.co.uk. The views expressed by the Legal Analysis interviewees are not necessarily those of the proprietor.
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