Enterprise in the Welsh countryside will be stifled and unlisted buildings put at risk due to an additional tax, rural economy expert CLA Wales has warned Welsh Assembly Government Heritage Minister, Rhodri Glyn Thomas.

CLA Wales Chairman, Ross Murray, says the Rating (Empty Properties) Act 2007 removed exemptions from empty property rates from April 1 this year, with the effect that landowners and farmers who have sought a change of use in the hope of supplementing income from agriculture will now lose money. And he has written to Rhodri Glyn Thomas outlining the impact of ‘a wholly unwelcome additional tax’."People now need to be much more certain that they are going to be able to consistently let these buildings where the use has been changed from agricultural to commercial", added CLA Wales Chairman Ross Murray.

"In my view, the Government has scored a major own goal through the rates levy on empty property. This will merely stifle diversification in rural Wales, where the investment and employment associated with new business is so critical to the rural economy.

"It’s also a failure of the devolution process because the Welsh Assembly Government was incapable of setting its own policy on this issue. If it wasn’t so serious I’d say that this was a very poor April Fool joke".

In his letter to Rhodri Glyn Thomas, Ross Murray wrote:"I must put it to you that, in both a rural and urban context, Wales' unlisted built heritage is unlikely to now receive the investment you would desire as Heritage Minister.

"The implications for Wales are as follows:

• Owners will be deterred from speculative development without significant pre-lets (unlikely in areas of low demand viz Rural Wales).
• Investment, if any, will be concentrated in areas of demand (again, I suggest not Rural Wales). If development is reduced over a long period of time the market could become two-tiered, with disproportionate rental increases as demand outstrips supply, and conversely falling rents in low-value areas.
• Prospering businesses may be forced to delay expansion plans with fewer properties to choose from.
• The pressure to abandon or demolish buildings will inevitably increase.
• The additional tax burden on business can only damage the flexibility and competitiveness of the Welsh economy".

Mr Murray stressed his disappointment that WAG had passed on the opportunity to modify the Act as it applies to Wales under its autonomous powers. The chance to reduce the 100% liability to a lower percentage and to increase the rate free period had been missed.

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