Real estate lawyers at Lodders Solicitors have given a guarded welcome to the Government’s empty property rate relief scheme for newly built commercial property which comes into effect on Tuesday, October 1.
Amy Bloomer, a trainee solicitor in Lodders real estate team, said: “The new exemptions cover properties that are completed after October 1 this year and before September 30, 2016, and those that are unoccupied for the first 18 months after their completion.
The temporary scheme states that empty non-domestic properties that currently qualify for a three month (retail property) or six month (industrial and warehouse property) rate-free period may benefit from a further 15 or 12 months of rate relief. The scheme is subject to state aid limits.
Miss Bloomer said: “If during the exemption there is a period of occupancy of the property of six weeks or less, the occupancy will be ignored and the business rates exemption will continue to run.
“If however, the property is let or occupied for more than six weeks during the exemption, the rates exemption will end at the start of the occupancy with a new exemption able to be claimed should the property become vacant again, if the property still satisfies the necessary criteria.”
The measure is intended as an aid to stimulate construction.
By reducing the risk of paying empty property rates on a newly built commercial property should the property not become fully occupied straight away should incentivise some commercial property projects to go ahead, helping to stimulate the construction industry.
Miss Bloomer said: “While this encouraging for those currently contemplating new commercial building construction it is disappointing as, at the same time, we are being told that there are no changes proposed to relief for empty buildings generally.
“This is a disappointment for landlords with empty properties and also those who are renovating property which is then not let or sold.”