The government has today published guidance to help local authorities administer the new empty property rate relief for newly built commercial buildings which will be available from next month.
The scheme, which the government estimates will benefit over 11,000 new commercial properties, was initially announced by the Chancellor in his Autumn Statement to encourage commercial development by reducing the business rates liability of the owners of unoccupied new buildings.
The temporary scheme will apply to unoccupied commercial properties completed between 1st October 2013 and 30th September 2016 and will provide 100 per cent relief for a period of 18 months following completion.
If the property is occupied during this time, the ratepayer will still be able to benefit from the rate relief for subsequent periods that the building is unoccupied during the 18 month time span.
The relief will apply to the building rather than the owner so, should the property change ownership while eligible for relief, the buyer or leaseholder will automatically be able to benefit from the scheme.
Local Government Minister Brandon Lewis said: “This move will boost confidence in the commercial property sector and allow them to develop new projects again without worrying about the risk of rate bills on empty buildings whilst they find a buyer.
“This is the latest is in a series of decisions by the government to address business rate concerns, help stimulate the construction industry and encourage economic activity across the country.”
However, the relief scheme has met with criticism from within the industry. The British Property Federation (BPF), which had previously questioned the benefits of the scheme, says that the government has missed the opportunity to end the blight of empty properties and the scheme will make little or no difference to construction activity.
The industry body says that, if the government is serious about creating growth in the sector, then the relief should be extended to buildings undergoing renovation and refurbishment too.
Chief executive of the BPF, Liz Peace said; “Granting relief to help the renovation or refurbishment of empty properties would have been a crucial boost for the economy and for our towns and cities, some of which have a chronic problem with vacancies, particularly on struggling high streets.
“Re-using existing buildings is good for the economy and good for the environment and should be supported by government, not penalised through the tax system.”
Mr Lewis’ statement that the government is addressing wider business rates concerns is also likely to be called into question.
