Tax and Occupancy of Business Properties: Theory and Evidence from UK Business Rates
We study the impact of commercial property taxation on vacancy rates and rents in the UK, using a new data-set, and exploiting exogenous variations in property tax rates from reliefs in the UK system: small business rate relief (SBRR), retail relief and empty property relief. We estimate that the retail relief reduces vacancies by 82%, and SBRR relief by up to 25%, while empty property exemption increases them by up to 90%. The effect of retail relief on clusters of urban properties (the “High St”) is no different to its overall effect. SBRR increases (decreases) the likelihood that a property is occupied by a small (large) business. We also use data on asking prices for rental properties to study the effect of reliefs on rental rates. Rental rates move in the opposite direction to vacancy rates, except in the case of empty property relief. All these findings are consistent with a novel model of directed search in the commercial property market, also presented in the paper.

(with Martin Simmler and Eddy Tam)
Date: 12 June 2024, 11:00
Venue: Saïd Business School, Park End Street OX1 1HP
Venue Details: Seminar Room 13 (East Wing)
Speaker: Ben Lockwood (University of Warwick)
Organising department: Saïd Business School
Organiser: Kristoffer Berg (Saïd Business School)
Part of: Oxford University Centre for Business Taxation Research Seminars
Booking required?: Required
Booking email: cbtevents@sbs.ox.ac.uk
Cost: n/a
Audience: Members of the University only
Editor: Alison Meeson