Changes to Empty Property Relief
With effect from 1st April 2016, the Non Domestic Rating (Unoccupied Property) (Scotland) Amendment Regulations 2016′ radically change the entitlement to Empty Property Relief.
Industrial properties will no longer qualify for 100% business rates relief. The new legislation restricts the duration for the 100% relief to six months only. After the expiry of the six month period, owners will be expected to pay rates on their unoccupied properties subject to a 10% discount on the standard level of rates that occupiers pay. However, if an industrial property has been vacant for a period of more than six months prior to 1st April 2016, there will be no initial six month exemption and owners will be immediately liable for 90% of the full rates liability.
Owners of other commercial property (retail and offices) will see the 100% relief for three months reduced to 50%. Thereafter, it will reduce to 10%.
In 2016/2017, the overall business rate paid by occupiers of properties with a rateable value over £35,000 will be set at more than 50p in the pound.
This is punishing news for the owners of vacant commercial and industrial properties. Whilst the short term benefit will be for tenants who will seek to capitalise on competitive incentives that landlords will offer to secure an occupier, the long term effect is likely to be a lack of investment in speculative developments and the eventual demolition of older industrial properties leading to a shortage of supply in industrial stock in Scotland.
The real winner is the Scottish Government which is likely to raise around £130M in income from these measures.< Back