Scotland proposes to cut empty rates relief
The Scottish government yesterday published the Unoccupied Properties Bill, which proposes to cut the empty property rate relief on some types of empty commercial property in Scotland to 10% from 50%. The move is intended to encourage property owners to bring empty retail premises in Scotland back into use.
The Scottish Property Federation, holding its annual conference in Edinburgh, noted that retail vacancy levels are running at 26% in some areas of Scotland, as it urged the Scottish government to work with the property industry to help it “unlock the potential for economic growth”. SPF director David Melhuish said the new Bill would do nothing to reduce the numbers of empty shops and offices in Scottish high streets. “On the contrary, the introduction of a similar policy in England saw shop vacancies rocket from 3% before the policy to over 14% today,” he added.
Mr. Melhuish said properties were empty because of a lack of demand for their use caused mainly by the recession, not in the vast majority of cases due to deliberate intention by their owners or investors. He said the new Bill was “simply an additional tax on failure” and warned it was likely to tip more properties and businesses into administration as “90% rates will be seen as unsustainable by their investors or lenders”.
“Rather than add tax to businesses unable to gain benefit or use from their properties, we urge the government to consider ways of turning empty units to better use and of supporting their return to business use and occupation, which will itself bring additional rate revenue,” he added.
Scotland’s local government minister Derek Mackay said the proposed reform of empty property relief would introduce incentives to reduce the numbers of empty shops “that hold back the development of our high streets”. He noted that even after the reform, the relief on offer for empty commercial properties would remain significantly more generous in Scotland than in England.
