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Tax and Occupancy of Business Properties: Evidence from UK Business Rate Reliefs

Author

Listed:
  • Ben Lockwood
  • Martin Simmler
  • Eddy H. F. Tam

Abstract

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.

Suggested Citation

  • Ben Lockwood & Martin Simmler & Eddy H. F. Tam, 2026. "Tax and Occupancy of Business Properties: Evidence from UK Business Rate Reliefs," American Economic Journal: Economic Policy, American Economic Association, vol. 18(3), pages 372-410, August.
    • Handle: RePEc:aea:aejpol:v:18:y:2026:i:3:p:372-410
    DOI: 10.1257/pol.20240302
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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • R33 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Nonagricultural and Nonresidential Real Estate Markets

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