Member News

IPTI | Update on U.S. & European Property Tax Issues: May 2021

The EACC, in partnership with the International Property Tax Institute (IPTI), wants to keep its members up to date with the latest developments in property taxes in the USA and Europe. IPTI has put together a selection of brief reports from articles contained in IPTI Xtracts which can be found on its website (


Pandemic-Driven Devalued Retail Real Estate Owners Should Seek Property Tax Reductions

Retail real estate has been one of the hardest hit markets by the COVID-19 pandemic. State shutdown orders and health guidelines, a shift in retailers’ needs, and tenant bankruptcies have created the perfect storm for declined retail space demand. Landlords have also had to endure government-mandated rent deferrals and holidays geared at assisting tenants. Even non-paying tenants have gained significant bargaining power over rents. Retail rent collections were reported at 20% to 40% in the Summer of 2020, and U.S. mall reappraisals in 2020 showed an average 60% drop in value from several years ago. The bottom line: retail real estate values have declined.

With this decline in property values, owners of malls, shopping centers, restaurants, gyms, and other retail properties should consider applying for a reduction in their property tax liability.

California Property Tax Appeals Overview

On the Jan. 1, 2021, valuation date, California’s Regional Stay at Home order was in effect and actively limiting the use and profitability of many retail properties.1 Therefore, retail taxpayers may wish to appeal the enrolled values of their properties, as the economic climate and government restrictions in place as of the Jan. 1, 2021, lien date clearly contributed to the decrease in these properties’ market values.

In California, when the fair market value of a property declines below its assessed value on the assessment roll of the county where the property is located, taxpayers can, and should, proactively request the assessor to reduce the assessed value. This is often called a “Prop. 8 Request,” referring to the proposition amending the California Constitution to require that assessed values be reduced to reflect declines in market value below the adjusted base year value.

For an informal review, some jurisdictions have a form by which such request can be made, but a simple letter will suffice. Be sure to identify the correct addressee to ensure your request does not go astray. Any such request should be supported by evidence of stabilized revenue, such as a 2019 income statement, as well as similar information for 2020, and budgets or proformas for 2021 and if possible, 2022. If an assessor solicits such information, provide it promptly. Assessors must finalize the tax roll by the end of June, so this request should be made as soon as possible, preferably before the end of April, to give the assessor time to process the request. Reductions in the 25% range seem to be emerging. Any such reductions are temporary.

Taxpayers should also strongly consider filing a formal Assessment Appeal Application for reduced assessment due to a decline in value with their local appeals board. This is so even if a Prop. 8 reduction is made, but such reduction is inadequate. Applications based on a decline in value must be filed during the regular assessment filing period for that county.2 If an appeal is not timely filed, the taxpayer generally loses the ability to contest the value later.

If the county assessor has elected to mail assessment notices to all owners of real property by Aug. 1, then the regular assessment filing period for all property is July 2 through Sept. 15.

If the county assessor does not elect to mail assessment notices to all owners of real property by Aug. 1, then the regular assessment filing period for all property is July 2 through Nov. 30.

The appeal must be based on the market value of the property as of Jan. 1 of the year in which the appeal is filed.

Colorado Property Tax Overview

Colorado assessors revalue properties every odd year, making 2021 a revaluation year. By May 1 county assessors will mail notices of valuation, which will show the change in valuation for this year.

For 2021, the 18-month base period (sometimes referred to as the data collection period) is Jan. 1, 2019 – June 30, 2020. Because hospitality-related properties were significantly affected during the base period due to shutdowns, restrictions, and revenue loss, hotel owners should consider protesting if the assessor’s property valuation is higher than market value. Property tax protests must be filed by June 1.

New York Property Tax Overview

In New York City, real property is reassessed annually. Property owners must file a real property income and expense statement (electronically) by June 1 of each year showing income and expenses for the prior year that the NYC Department of Taxation and Finance will use to arrive at the assessment for the following January. The Department issues a Notice of Property Value with the tentative assessment by Jan. 15, showing the value it placed on the property as of the tax status date of Jan. 5. In order to protest the assessment, an Application for Correction must be filed with the New York City Tax Commission by March 1 for all properties other than one-, two- or three-family homes.

Applicants to the Tax Commission with properties with an actual assessed value of $750,000 or more have until March 24 to file a Tax Commission Income and Expense statement updating the income and expenses for the immediate past year. The Tax Commission will hear and determine all applications within a year after filing. If an offer to reduce the assessment made by the Tax Commission is not accepted by the taxpayer, or if no offer is made, owners must file a petition with the New York State Supreme Court in the county in which the property is located by Oct. 24.

New York’s Temporary Suspension and Modification of Laws Relating to the Disaster Emergency Executive Orders were issued after the Jan. 5, 2020, tax status date and did not enter into consideration of values for the 2020/2021 tax year. These will be considered in the valuations as of Jan. 5, 2021, as they clearly contributed to the decrease in these properties’ market values.

New York: NYC Advisory Commission on Property Tax Reform to Relaunch Public Hearings on Its Ten Preliminary Recommendations

The New York City Advisory Commission on Property Tax Reform announced it would relaunch the public hearing process on its 10 preliminary recommendations, starting with virtual hearings for Staten Island on May 11 and Brooklyn on May 27.  Both hearings will begin at 6:00pm.  Initially delayed by the COVID-19 pandemic, the hearings will resume virtually. The Commission will be holding virtual hearings for all five boroughs and will be scheduling hearings in other boroughs soon.

On January 31, 2020, the Commission released a Preliminary Report with 10 initial recommendations to make NYC’s Property Tax System simpler, clearer and fairer.  The Commission was formed by Mayor de Blasio and City Council Speaker Corey Johnson in 2018 with a mandate to reform NYC’s property tax system while ensuring there is no reduction in revenue used to fund essential City services.  An in-person hearing following the report’s release was initially scheduled for March 12, 2020 in Staten Island, but later postponed due to COVID-19.

The Commission is soliciting input from the public on the 10 initial recommendations in the Preliminary Report, specifically whether they would achieve the goals of a fairer system, would be improved by certain modifications, or should be enhanced with additional recommendations.  To testify, speakers may register at the Commission’s website.  Anyone wishing to testify must register no later than 24-hours in advance.  Following registration, speakers will receive further instructions.

Speakers may (but need not) submit their presentations ahead of time by emailing them to or uploading them through an online portal. The portal and email address may also be used by those who are unable to attend but wish to submit testimony.

New York: Where do the NYC mayoral hopefuls stand on property tax reform?

First the good news. Delayed by delays and then shelved for a year due to the COVID pandemic, Mayor de Blasio’s long trumpeted Commission on Property Tax Reform is back! The Commission recently announced it would resume holding virtual hearings in all five boroughs to make recommendations on how best to fix New York City’s inequitable property tax system.

The bad news is that our current mayor will no longer be in office to live up to his commitment by the time the Commission publishes its final report. We started 2020 by finally making some progress on reforming New York City’s badly busted property tax system. Then COVID hit. Now, the dire need for this Commission and the urgency for it to complete its work has never been more clear.

City Hall must have a comprehensive plan to amend New York’s property tax system in a way that makes assessments more reflective of the real value of homes and less permissive of high-value properties in certain neighborhoods to pay a significantly undervalued share.

We have heard time and time again how the Mayor’s own properties in tony Park Slope are taxed at a far lower rate than most homes owned by middle-class New Yorkers in the outer reaches of the five boroughs. Enough talk. The unfairness is indisputable, blindingly stark, and it must be changed once and for all.

But there is hope. In fact, it may work to our benefit that the Commission’s plan will fall on the shoulders of New York City’s next mayor.

Bill de Blasio has not been effective in leveraging the powers and pulpit of the mayoralty against the powers that be in Albany. And now, as a lame duck, he will have even fewer chips to play. We hope that whoever becomes the 110th Mayor of the City of New York has the political capital to go toe to toe against the stagnation, waste, and special interests of the state capitol.

The state’s constitution will require de Blasio’s successor to travel up the Hudson – like 109 mayors who came before – and wrestle the best deal they can through the legislature. New Yorkers of all stripes – homeowners, tenants, renters and small landlords – should join us in demanding each candidate commit to supporting the tax commission’s recommendations.

Look, New Yorkers are squeezed. Google any metric, from income taxes to your electric bill, and you will find New York at or near the top of the list. Nobody is immune to the climbing costs of housing, healthcare, transportation, and other necessities.

And, out here in the exotic outer boroughs, homeowners are not the super-rich. They are public school teachers, firefighters, seniors on fixed incomes, retired city workers and hardworking families that are the second or third generation of their family to live in their childhood home. Property tax relief, not in the form of gimmicks or givebacks, but a real reform of the system, is one way which the next mayor can fight to keep our city truly affordable.

For the candidate willing to invest in a real property tax solution – or to even simply turn and address it – the payoff could be quite fruitful on Election Day. The property tax system impacts homeowners and renters, landlords and developers – virtually all of the city’s 8.5 million residents. 33% of New York households own their own homes and almost 100% of those are concerned about rising taxes.

Experts have proven that the New York City property tax system clearly discriminates against communities of color. There is near universal consensus among policy wonks across the spectrum that comprehensive residential property tax reform is long overdue. Yet, we have not seen any effort by any top-tier mayoral candidate to earn these voters’ support by discussing this problem and telling us what they’ll do about it if elected.

Property owners are one of the largest and most diverse blocs up for grabs in next month’s primaries. But this isn’t just about homeowners – it’s about renters, too! Unlike other cities, nearly two thirds of New Yorkers are renters, and most cannot afford to own their home.

In a city dominated by renters and challenged by insanely high and rising rents, renters often bear the brunt of this busted system because the significantly higher tax burden on rental properties is often passed on to the renters in the form of higher rents or cuts to repairs and building maintenance.

New York: Here’s why Andrew Yang wants to hike taxes on vacant NYC land by 500%

Mayoral candidate unveiled a proposal to increase taxes on vacant land by 500%. If you tax it, they will come — at least Andrew Yang hopes so. The math-loving businessman, who is running neck and neck with Brooklyn Borough President Eric Adams in the race to become the city’s next mayor, pitched a plan Thursday to raise taxes on vacant commercial lots by 500 percent over five years, saying the hike would spur development while generating nearly $1 billion a year for the city.

“Land is New York’s most precious resource, yet there are thousands of lots across the city sitting wasted and undeveloped because there’s effectively a disincentive to build,” Yang said Thursday at First Avenue and East 38th Street, a notorious piece of East River-facing real estate just south of the United Nations that’s sat empty since 2000 when the late billionaire developer Sheldon Solow purchased it from Consolidated Edison.

Yang and others argue that the low valuation and tax rate gives developers an incentive to sit on vacant lots instead of building on them.

“As mayor, I’m committed to making it easier to build in New York City. Raising the assessment on vacant land to its market value would spur housing and economic development while generating hundreds of millions of dollars in much-needed revenue for the city,” Yang said.

Commercial vacant land is currently valued and taxed at under 20 percent of its market value. Yang wants to change that and instead tax the properties based on their sales prices. He says the plan would generate $900 million in city property tax revenue.

But many real estate developers disagree with his premise saying it would make the properties more expensive to build out — especially at a time when construction in the city has slowed to its lowest rate in almost a decade because of the pandemic.

“The city’s property tax system is fundamentally broken and we agree with Andrew Yang that it needs comprehensive reform, but this idea will not help to achieve that goal,” said James Whelan, president of the Real Estate Board of New York. The city’s leading industry group, REBNY represents commercial, residential and institutional landlords.

However, Martha Stark, head of the city’s Finance Department under former Mayor Michael Bloomberg, said Yang’s plan makes sense. “I want to give them credit. I think they’re on to something. I agree there is that additional value available to be assessed against these properties,” Stark said. She added that it was “a good idea” although “maybe not as easy” to execute as Yang made it seem. She estimated that it could draw more like $500 million in additional revenue, not $900 million.

Pennsylvania: A ‘progressive’ approach to taxing land gains traction in Philly Council

City Council is considering a new approach to taxing real estate that advocates believe could lower assessments for less affluent property owners without reducing the city’s overall haul. “We need to look at how we can grow out of poverty, especially for businesses of color” Councilmember Derek Green said at a hearing he spearheaded on the feasibility of a so-called land value tax.

Green believes now is the time to rethink Philadelphia’s approach to property taxes, after a pandemic year that cost the city hundreds of millions in lost wage and business tax revenue and raised significant questions about the wisdom of relying on those streams in a world where remote work is increasingly an option. Without $1.4 billion in federal aid delivered by President Biden’s America Rescue Plan, the city would have faced significant budget shortfalls.

Philadelphia “needs to be looking at how we do taxation in our city, especially considering the significant impact that the pandemic had on the economic fortunes on the city,” Green said.

Unlike a traditional property tax, land value tax is assessed based on the value of a piece of land, rather than the value of the “improvement” or building. Instead of seeing taxes rise and fall based on the condition of a building, a property owner pays based on the value of the location, taking into account public infrastructure and other nearby assets. Advocates describe the approach as “progressive” and believe it discourages speculation and blight while lowering the tax burden for property owners in areas with less public investment and lower market values.

That issue of equity has haunted the city’s ongoing effort to overhaul the city’s property tax system. A 2019 report from the city’s Controller Office found the city’s Office of Property Assessment does a “worse job” assessing properties in areas with lower home values. “Less expensive homes in these areas tend to be over-assessed relative to more expensive homes,” stated the report from City Controller Rebecca Rhynhart. Higher tax assessment translates to greater tax burdens, which means lower-income residents are “likely paying more than their fair share of property taxes.”

City assessors have particularly struggled to get the numbers right in West Philadelphia, Southwest Philadelphia, and North Philadelphia, according to the Controller’s report.  These sections have more regressive and less uniform assessments while also having the lowest median income in the city, ranging from $18,000 in North Philadelphia to $26,000 in West Philadelphia, Rhynhart’s office found.

If Philadelphia shifted to a 50-50 ratio of tax on buildings and land, homeowners across the city would see a collective savings of more than $60 million each year, according to Josie Faass, the executive director of the Robert Schalkenbach Foundation, which promotes property tax reform as a vehicle for economic justice and equity.

With a true land tax, that figure could jump to $123 million. The folks who would pick up the slack would be speculators and absentee owners of vacant land, according to proponents of the economic theory.

Stephen Mullen, an economics expert at Econsult Solutions, said he’s supportive of the idea of implementing a partial land value tax program, which would mean phasing in a more heavily weighted land component each year.

“If combined with certain regulatory changes and zoning changes, it would lead to significant increases in capital investment in the city’s commercial and residential buildings, which means a greater supply,” Mullen said.

Within City Hall, the Kenney administration is more circumspect about the theory. Philadelphia’s Revenue Commissioner and Chief Commissions officer Frank Breslin said making the switch would open up a can of legal worms while threatening the city’s financial stability.

He said the city doesn’t have the authority to enact a land value tax and could be forced to refund all taxes if the approach was found to be unconstitutional.

“If we enacted such attacks and lost in court, it is possible that the entirety of real estate tax revenue for both the General Fund, and the school district could be in jeopardy for the tax year in question,” Breslin said. Mayor Jim Kenney’s budget proposal for this year includes tax cuts for both wage and business taxes.

According to Steven Wakefield, a deputy city solicitor, there are 14 jurisdictions in Pennsylvania that have a land value tax after obtaining authorization from the state for the reform. Allentown and Harrisburg have a form of split-rate taxation where there are two different property tax rates, one for buildings and improvements and the other for land value.

Meanwhile, the Kenney administration is not reassessing properties for tax years 2021 or 2022 because of delays in a planned rollout of a new Computer Assisted Mass Appraisal System (CAMA). The new system was promised in 2013 to help improve the accuracy and uniformity of property assessments.

Washington: Tax Increment Financing Comes to Washington

Washington communities have a new tool to drive economic development: tax increment financing. Sometimes called “TIF,” this funding method allows local governments to self-finance public improvements that encourage development without imposing new taxes. The 2021 Washington legislature passed a TIF program and Governor Inslee signed it into law on Monday, May 10, 2021.

Under the TIF legislation, a local government may designate one or two areas targeted for development and may incur indebtedness or issue general obligation bonds to finance public improvements within the area or areas. Certain limitations steer TIF developments toward areas in particular need of infrastructure investment. For example, the assessed values of the designated TIF areas cannot exceed the lesser of $200,000,000 or more than 20 percent of the sponsoring jurisdiction’s total assessed valuation. Thus, a local government must carefully delineate the geographic boundaries of a TIF area.

The legislation also sets requirements likely to maximize the public benefits of TIF programs. A sponsoring governmental entity must hold public briefings and pass an ordinance that specifies the public improvements involved, and it may not add additional improvements after adopting the ordinance. The local government must expressly find that it expects the improvements will encourage private development that would not otherwise occur within the designated area. It must also find that the TIF area’s assessed value will likely increase more with the improvements than without them, thus increasing the tax revenue generated in the area. That increased revenue—the “tax increment”—is pre-allocated to pay or repay the costs associated with the public improvements.

Until the TIF legislation, Washington communities lacked this funding source used by 48 other states and Washington, D.C. The City of Milwaukee, WI, for instance, used TIF funding to redevelop a former railyard that sat vacant for 20 years. A TIF program funded demolition, site remediation, storm water improvements, and new roads, utilities, and landscaping. As the light industrial area with over 60 acres of recreational space revitalized, the development created 5,000 new jobs and increased property values by over 1,400 percent.

Washington’s new TIF legislation gives localities a new ability to renovate public spaces in ways that attract new development, removing a competitive disadvantage Washington cities previously faced in comparison to neighboring Oregon and Idaho municipalities.

Ohio: Enacts Limited-Time COVID-19 Real Property Tax Valuation Relief

A significant real property tax savings opportunity is now available if you are an Ohio real property tax taxpayer who believes the value of your property has depreciated due to the impact of COVID-19 pandemic.

In an effort to assist taxpayers who have experienced a decline in the value of their real estate due to the COVID-19 pandemic, Governor DeWine has signed into law Sub. S.B. 57, which goes into effect on July 26, 2021.  This is the first day a complaint can be filed.

The legislation authorizes an eligible party to file a special “COVID-19” complaint with the specific county Board of Revision requesting that a property’s tax valuation for tax year 2020 be determined as of October 1, 2020, instead of the January 1, 2020 tax lien date typically mandated by Ohio law.  Ohio’s statutory restriction on filing only one complaint in each three-year valuation period also is lifted if an owner wishes to file a tax year 2020 COVID-19 complaint.  This opportunity is therefore available to all that qualify.

To qualify for this special consideration:

  • The owner must demonstrate that the real property’s value has been reduced due to circumstances related to the COVID-19 pandemic or a COVID-19-related order issued by the governor or a state agency.
  • The special complaint must be filed on or before August 25, 2021.
  • The special complaint must state with particularity how the COVID-19-related circumstance or order caused the reduced real property value.

This specificity requirement threatens to be quite complex.  The legislation also expressly authorizes the Boards of Revision to dismiss a complaint that does not satisfy this requirement.  Great care needs to be exercised in seeking relief under this new provision.


Greece: Ktimatologio, E9 and ENFIA crucial for your property in Greece

The Greek government revealed a plan that tax auditors will obtain access to the E9 tax listings of property owners and to their respective Ktimatologio land registry filings

What would possibly connect a court claim for a piece of property, with payment of the property tax for it? The answer is Greek law. The Greek administration has invented several ways to force property owners to pay property tax. Some call it extortion. Some others believe it is a reasonable measure to enforce the law. Even several courts in Greece have issued rulings stating that the law which says that if you have not paid your property tax, you can’t protect your property from trespassers at the court, is unconstitutional, because the law can’t deprive a property owner from his inalienable human right to seek court protection for his threatened private property, if the owner has not paid property tax.

The reality is that, as a lawyer, I have to advise a client who wishes to claim a property at the court, that one of the preconditions for our civil lawsuit action to be considered admissible by the court, is to produce written proof that this specific property has been filed at the E9 tax listing of properties and the ENFIA yearly property tax has been paid. This is a secure way to know that the court will accept to review our action. Every property owner in Greece, therefore, must know that listing his/her real estate properties to the E9 tax registry and paying the ENFIA property tax is a requirement for keeping their properties’ status updated. Moreover, property owners can’t sell or transfer the property to anyone, unless they have listed the accurately described real estate to the E9 tax registry and have paid the ENFIA.

This means that house, plot and landowners who own them with titles, deeds and survey maps dated before 2010, may have to retain a civil engineer to measure their properties again today, using a modern GPS – based system, in order to obtain their more accurate measurements, which they have to then update with their E9 tax filing. Because, when they are to sell or transfer them, or even declare them to the modern land registry called Ktimatologio, they have to describe them in a most detailed way, to ensure legal certainty and technical accuracy and to avoid or minimize disputes and court litigation with neighbours or relatives who may claim the same property for themselves.

Sources at the Greek government revealed a plan that tax auditors will obtain access to the E9 tax listings of property owners and to their respective Ktimatologio land registry filings. Their aim will be to compare, for any taxpayer in question, the two property filing systems and confirm whether properties listed with the Ktimatologio land registry have also been listed to the E9, so that property taxes are paid correctly. If the auditors discover that a tax payer has omitted or “forgotten” to list in the E9 tax filing one or more properties registered with the Ktimatologio land registry, they will impose retroactive fines and taxes. In addition, any legal change, development, sale or transfer of the property in question will be put on hold, until the property is accurately described in both E9 tax filing and the Ktimatologio land registry.

Ireland: Local property tax under scrutiny in expert review

The local property tax may soon be a thing of the past as the government considers replacing it with a site value tax. A group of experts have been asked to examine how the tax works and whether change is necessary.

The LPT is a self-assessment tax so it is calculated based on an individual’s own declaration of the market value of the property. Revenue does not value properties for LPT purposes. A site value tax is a charge on the value of land, not taking into account any property.

The property tax has proved contentious since its introduction in 2013 and groups such as Social Justice Ireland have said that a site value tax is fairer. The tax paid is still based on 2013 valuations. As house prices have risen significantly since then, the government fears that updating the valuations would result in much larger bills.

Paschal Donohoe, the finance minister, yesterday launched the commission on taxation and welfare, which will look at a broad range of issues. The terms of reference state it will “consider the appropriate role for the taxation and welfare system, to include an examination of the merits of a site value tax, in achieving housing policy objectives”.

Ronan Lyons, an economist at Trinity College Dublin and for, a property website, said the site value tax should replace a series of other taxes on properties. He said: “The biggest bang for your buck, would be replacing not just the local property tax, it should replace commercial rates and development levies as well. It would definitely help if it were levied instead of the LPT. It is more equitable, it’s basically a wealth tax on social wealth.

“If it applies to all land, not just land under private homes, then you have a strong incentive for land to be used well, in particular publicly owned land.”

He added: “It should be an easy win for this to be levied on commercial and development land, but I can imagine the politicians baulking at replacing the local property tax with it. Changing a tax like that is like attacking a wasps’ nest.”

The commission was a commitment from the programme for government between Fianna Fáil, Fine Gael and the Green Party. It will take account of the impact of the Covid-19 emergency, ageing demographics, digital disruption and automation as well as the long-term strategic commitments of government regarding health, housing, and climate.

Niamh Moloney, professor of financial markets law at the London School of Economics and Political Science, will chair the commission. Members will be appointed in the coming weeks. Colm O’Reardon, assistant secretary-general in the Department of Finance, will lead the secretariat to the commission. He was previously special adviser to Eamon Gilmore when the Labour Party was last in government.

The commission will also look at what changes, if any, should be made to the social insurance system. In addition, it will be tasked with examining how the taxation system can be used to help Ireland move to a low carbon economy.

Donohoe said: “I am delighted today to announce the important work of the commission on taxation and welfare will begin in the coming weeks. This independent work will ensure the sustainability of the public finances into the medium to longer term and identify potential reforms to the tax and social welfare system so that the evolving needs of our society can continue to be met.”

The commission will report back to the minister by July next year, in time for the budgetary process.

UK: British retailers say closures and job losses still a risk despite lockdown easing

Trade body urges government to deliver on promise to reform business rates to protect sector

Store closures and job losses are a threat to Britain’s retail sector despite an increase in activity following the easing of lockdown restrictions, the government has been warned by the industry’s trade body.

The British Retail Consortium said a pick-up in April as non-essential stores reopened should not be seen as evidence of full recovery and urged ministers to make good on their promises of reform to business rates.

The BRC’s monthly update reported that in the final three weeks of last month, non-food sales were up by about 25% when compared with the levels of spending seen in March, when restrictions were tighter. Non-essential retail opened in England and Wales on 12 April and at the end of the month in Scotland and Northern Ireland.

Meanwhile, a separate report from Barclaycard said spending and confidence were both up but a full recovery in hospitality would be delayed until bars and restaurants were able to take customers inside.

Helen Dickinson, the BRC’s chief executive, said: “Many fashion retailers saw an uptick in sales, particularly in outerwear and knitwear, as the public braved the cold spring weather for outdoor meeting and dining with friends. Furniture also saw a boost as consumers can once again try before they buy.

“However, this sales growth is fragile. There is little competition for share of spending while parts of hospitality, leisure, and tourism remain restricted and inner-cities and town centres continue to perform poorly as many people continue to work from home.”

Dickinson said there were 530,000 people working in retail still on furlough, adding that he end of wage subsidies and full business rate relief jeopardised the future of many stores and the jobs of those who depend on them.

“The government must deliver on its promise to reform the broken rates system in their ongoing review and reduce the financial burden on retailers, or risk more unnecessary store closures and job losses.”

Barclaycard said consumer spending grew 0.4% in April compared with the same period in 2019, while confidence in the economy was at its highest level since the onset of the pandemic. Spending in bars and pubs was down by 67% in April compared with April 2019.

Raheel Ahmed, Barclaycard’s head of consumer products, said: “The economy should hopefully gather momentum as we head into the summer and see the reopening of indoor hospitality venues. Yet what is most encouraging is that the easing of restrictions seems to have lifted the nation’s spirits, with many Brits relishing the simple pleasures of dining out and making social plans.”

UK: Rates overtaking rent as biggest retail property cost

Business rates are so ‘far removed from the commercial reality’ that ‘in historical terms, this is going to look like a window and chimney tax,’ said Colliers’ David Fox. Plummeting rents mean business rates are now the biggest property expense faced by many shopkeepers, according to British Land.

Business rates are currently based on the open market rental value of property in 2015. For large businesses, the tax is set at 51.2p on every £1 of rent payable at that time, and for small businesses 49.9p. However, because retail rents have fallen so much during the pandemic, instead of being about 50% on top of the rent bill, the tax can now be over 100%.

“The current system is out of touch with economic reality as rates payable are based on valuations made years ago,” said Matt Reed, head of retail asset management at British Land, one of the UK’s biggest commercial landlords.

“Across our portfolio business rates have become disconnected from rental values, meaning some occupiers are paying higher business rates than they are rent, making it harder for shop owners to keep their shops open and support jobs.”

BRC property policy advisor Dominic Curran added that rates regularly exceed rent “especially in the north”. “I know of cases where rents were basically zero and yet units were still unlettable due to rates,” he added.

Even before the pandemic the government had repeatedly been slammed by retailers and landlords for failing to reform business rates faster, with the next revaluation not due until 2023. The final report on a consultation on long-promised fundamental reform of the tax is not due till the autumn.

Meanwhile, business rates relief is being phased out from 1 July, to be capped for the rest of the financial year at £2m for non-essential retailers and £105,000 for essential.

According to the British Property Federation, retail rents outside London had already fallen by about 30% over the previous decade even before the pandemic started. “Including inflation, it’s more like 50%,” said BPF CEO Melanie Leech.

Property agents estimate rents have fallen by up to another 50% since the start of the pandemic, depending on the type of retailer and location, leaving business rates “quite often higher than rents now”. One leading property source told The Grocer the tax bill could be as much as 150% on top of rent for tenants of some shopping centres.

Colliers International co-head of retail agency David Fox said: “In historical terms, this is going to look like a window and chimney tax. It is that far removed from the commercial reality on the ground.

“Parts of the retail world have performed well throughout the pandemic, food stores and discounters and the like, but even for them business rates are out of kilter with where rents sit today.”


  • Paul SandersonPresident | psanderson[at]
  • Jerry GradChief Executive Officer | jgrad[at]
  • Carlos ResendesDirector | cresendes[at]

Compliments of the International Property Tax Institute – a member of the EACCNY.