Tax and Occupancy of Business Properties: Evidence from UK Business Rate Reliefs
2026-07-30
We study how UK property tax rates impact commercial vacancies and rents, using new data and exploiting exogenous variations in two major property tax reliefs: small business relief and retail relief. We estimate that both reliefs are effective at achieving their objectives. A given monetary relief per property will lead to a bigger reduction in vacancies for eligible properties if given via retail relief because small business relief is targeted only at small businesses. Small business relief has a bigger effect in clusters of urban properties, while both reliefs are more effective in reducing retail vacancies in less deprived areas. (JEL D22, H25, H32, L81, R33)