A new empty property rate relief scheme for newly-built commercial buildings is due to become available next month. According to Local Government Minister Brandon Lewis, the scheme is set to restore confidence in the commercial sector.
The working mechanism of the scheme was recently announced, however property consultant GVA says the industry remains unimpressed.
The rates relief scheme covers all offices and commercial properties completed between 1 October 2013 and 30 September 2016 with a maximum vacant relief period of 18 months.
Leigh Richardson, Senior Director at GVA in Bristol comments: “In the South West, a lack of new modern business space is hindering economic recovery and hopefully this publically funded scheme, extending the exemption period for new build developments to 18 months, will give an incentive to developers and could boost construction in the region.
“However, it is the EEC state aid limits which make the scheme fairly unattractive for larger new builds. No development company can receive more than the equivalent of 200,000 euros (£170,000) in relief for a new build, the government defining new build as more than 50% new. Certainly expectations following the chancellor’s budget announcement have been severely tempered by the detail.”
The scheme is worth an estimated £150 million and is intended to benefit over 11,000 new commercial properties including factories, offices and warehouses.
Mr Richardson further comments: “The biggest disappointment is that the scheme only relates to new structures and has not been extended to cover extensive landlord fit-outs on older property.”
