The Scottish Government’s plans to reform the regime for rates relief for empty properties could have significant implications for a large number of properties already vulnerable because of the recessionary market, Howard Elliott has warned.It was announced in the Scottish Government’s spending review last year, that rates relief for empty commercial property is to be reformed allegedly ‘to provide strong incentives to bring vacant premises back into use, reducing the prevalence of empty shops in town centres and supporting urban regeneration’.Details of these reforms have now been made public in the Local Government (Unoccupied Properties etc)(Scotland) Bill.Broadly the proposals are to reform the empty property relief regime in the following ways:
The effective date for these changes is not yet certain, although the anticipated date is April 2013.Howard Elliott warns that the potential impact on office and retail premises in particular is a cause for concern. He says that “even the requirement to pay say 50% of the rating liabilities might be a struggle for some owners or tenants who have vacated in the current climate. Adding to the costs of the disposal with up to a 90% rating liability will not be welcomed. The ‘stimulus to bring vacant premises back into use’ argument has long been used south of the border and is entirely a misnomer.For further information please do not hesitate to contact Howard Elliott, Head of BDT’s Rating Department.