22 Aug 2017
Today’s recommendation for a business investment incentive from the independent business rates review has been welcomed by the Scottish Property Federation (SPF), the voice of Scotland’s real estate industry. Some of the key measures in the review include -
• An annual business growth incentive estimated to be worth £45mn to grow the economy is welcome news and follows calls by the SPF for the Scottish Government to attract investment and development to Scotland through new commercial development.
• In particular, it is proposed that there should be a one-year relief from business rates for new build properties. This will be particularly welcome for developers seeking to build new offices or industrial properties, or for investors to improve and enhance their existing commercial property stock. The tax incentive will also apply where there is a new tenant in place which should support businesses making commitments to relocate to new or redeveloped offices, shops and industrial premises.
• The Barclay Review also proposes an expansion of the fresh start scheme so that it is a more effective incentive to promote town centre businesses. This is a welcome improvement but we await to see the further eligibility criteria to be applied for this relief should it be accepted by the government.
• The SPF also welcomes the proposal to move to a three-year revaluation cycle and crucially to a one-year gap between the tone date (the date of market rental assessment) and the revaluation coming into effect. While this should be combined with a review of how various property types are assessed, it should make for a closer relationship between the property market and the rates assessment, rather than gaps of up to seven years which allowed the rating system to become hugely disconnected with market reality.
Paul Curran, Chairman of the Scottish Property Federation commented:
“With the supply of new offices and industrial stock at very low levels, the SPF has strongly argued that the sector needed a positive signal to boost investment and the jobs brought by new commercial developments. The Barclay proposals are hugely welcome and we encourage the Scottish Government to adopt them as soon as possible.
“We very much welcome the review’s recommendations to reduce Scottish large business supplement to the same level as its English equivalent in 2020/21 – therefore bringing about a level playing field across the UK and ensuring that the Scottish real estate market remains competitive with our neighbours south of the border.
“Amongst some of the good news we are concerned about the recommendation on rates relief for listed buildings which often provide complex redevelopment challenges. The loss of this relief after two years may make investors think twice about re-developing such buildings to bring them back into use and we will continue working with Government to make them aware of these challenges".
About the 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.