Removal of Scottish empty property business rate relief an own goal, say Scottish Property Federation

21 Sep 2011

Policy area: Business rates

Today Scottish Ministers announced that from April 2013 long term empty property rate relief would be reformed, meaning it is expected to be significantly reduced from that date. 

Early discussions with officials suggest that the intention is to retain a  competitive advantage over the policy in England but this will come as little comfort to businesses, public authorities and smaller property investors who will own the majority of empty properties in Scotland.

David Melhuish, Director for the Scottish Property Federation commented: "Supporters of removing the relief may think this provides an incentive for vacant shops to be brought back into use.  If this was so, why have vacancy rates in England soared since the relief was removed south of the border? The fact is that most major landlords and investors in Scotland have worked hard to retain low vacancy rates. The implication of this is that it will be smaller property investors who will unfortunately face the greatest increase in their rates Bills.

"Unfortunately this is an own goal by the Scottish Government.  Not only will there almost certainly be a large extra bill for public sector ratepayers but businesses struggling to downsize as a result of the recession will also be caught."

Although in England substantial revenue savings were anticipated by the UK Government recent evidence suggests this has not in fact been achieved.  Worse, the removal of relief for empty properties adds significant risk to investors in new and redeveloped commercial buildings and in the current fiscal climate this will further reduce any appetite for economic development.