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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.
