15 Dec 2016
Policy area: Finance
Responding to this afternoon’s Budget statement, the Scottish Property Federation (SPF) has warned that the Scottish Government has missed an opportunity to support growth by reforming empty property rates relief and residential Land and Buildings Transaction Tax (LBTT).
The SPF’s analysis suggests that empty rates are a liability that acts to deter new speculative development in the commercial sector, thus reducing overall supply of commercial premises such as new offices and providing a drag on government revenues.
On LBTT the SPF remains concerned that through not lifting the threshold for the 5% band of residential LBTT from £325,000 to £500,000, the economy will see reduced transactions at this level which will also limit more valuable transactions. The supporting documents in the budget confirm a current expected shortfall of some £74m that the SPF believes is attributable in some measure to the high 10% rate at properties in the £325,000 to £750,000 range.
SPF Director David Melhuish said:
“By not reforming empty property rates relief or residential LBTT, the government is missing an opportunity to boost new development and residential property transactions, both activities which will ultimately benefit the Scottish Government’s revenues. We believe there is growing evidence that these measures are deterring new jobs and investment and call on the Scottish Government to reconsider the evidence before the Budget completes its parliamentary consideration.
“However, we welcome the freezing of commercial LBTT rates which offers a small tax advantage over other parts of UK and the raising of the large business supplement threshold is a welcome step. On non-residential LBTT, we welcome the decision to freeze the rates and thresholds which offers Scottish investments a welcome transaction tax advantage compared to wider UK commercial property investments.”
Notes to editors
Read the Scottish Property Federation’s pre-Budget letter to Derek MacKay here.
About Scottish Property Federation
As a membership organisation the Scottish Property Federation (SPF) is the voice of Scotland’s real estate industry. Established in 2007, SPF represents 185 organisations operating in Scotland. We include among our members: property investors including major institutional funds, developers, landlords of commercial and residential property, and professional property consultants and advisers. The SPF works closely with those who advise and decide on public policy in Scotland to ensure that they are aware of the consequences of their decisions for the property industry and wider economy.
As part of the British Property Federation we also benefit from close links with the leading UK property companies and investors in the UK as well as the BPF's contacts with Westminster.
For more information, please visit http://www.scottishpropertyfederation.org.uk or follow us on Twitter @ScotPropFed.