American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
Tax and Occupancy of Business Properties: Evidence from UK Business Rate Reliefs
American Economic Journal: Economic Policy
(pp. 372–410)
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.Citation
Lockwood, Ben, Martin Simmler, and Eddy H. F. Tam. 2026. "Tax and Occupancy of Business Properties: Evidence from UK Business Rate Reliefs." American Economic Journal: Economic Policy 18 (3): 372–410. DOI: 10.1257/pol.20240302Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- H25 Business Taxes and Subsidies including sales and value-added (VAT)
- H32 Fiscal Policies and Behavior of Economic Agents: Firm
- L81 Retail and Wholesale Trade; e-Commerce
- R33 Nonagricultural and Nonresidential Real Estate Markets