How a Vacancy Tax Can Boost Business

A vacancy tax is imposed on commercial property which has remained vacant for too long.

The idea is motivated by a desire to reduce the number of sad-looking vacant store fronts.

The intent of the vacancy tax is to encourage more landlords to fill their vacant store fronts by renting the space to useful local businesses.

A vacant store front is often the result of a landlord demanding too high a rent. Small businesses can't lease the space for a shop because the expense of the rent wipes out their profit. This is especially true for a new business, which needs to become profitable soon, while building up a customer base.

A wealthy landlord, who owns several properties producing plenty of income, can afford to keep a space vacant, while waiting for a tenant who can cover a large rent.

Being required to pay the vacancy tax might be enough to motivate the landlord to demand a somewhat lower rent, which a small business can afford.

The tax doesn't have to be very much -- just enough to be an annoyance to the landlord as a businessman. It's kind of like the "sin tax" on cigarettes or booze; the idea is to change behavior. In any case, the vacancy tax is not going to be a great revenue source for government.

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