Chancellor George Osborne has announced plans to make newly built commercial buildings exempt from empty property rates
Delivering his Autumn Statement to the House of Commons today, Osborne said the creationg of a ‘long grace period’ for unlet office spaces was a ‘sensible’ idea.
From October next year until September 2016, all new offices will be free from the rates for their first 18 months.
Currently shops and offices must pay the rates but empty factories and warehouses are fully exempt.
Liz Peace, chief executive of the British Property Federation which has been campaigning against the rates since relief was scrapped in 2008, welcomed the announcement.
She said: ‘This is a welcome first step towards mitigating the damage being wrought by empty property rates and we commend the Chancellor for taking heed of the powerful body of evidence that we and other industry groups submitted to MPs and to Treasury over the Summer.
She added: ‘The Government is rightly desperate to get Britain building again. Introducing a grace period for empty property rates for new development will remove a millstone from around neck of the property industry, and let it get on with what it does best – investing in our towns and cities, regenerating communities and building the offices, factories and shops in which we work.
‘However, we urge ministers to look further at how this tax on business failure continues to act as a drag on economic growth.’
The chancellor also pledged to create a new single funding pot for Local Enterprise Partnerships and provide £1 billion of extra capital for its business bank for small and medium sized firms.
RICS chief economist Simon Rubinsohn said: ‘We are delighted that the government have acted on our recommendations and extended the empty property rate exemption for new build commercial premises from October next year. This will help take the break off speculative development, provide a badly needed boost to the wider economy and help to repair our struggling high streets.
‘While the LEP single fund and small business bank are very welcome, this money needs to be targeted at regional level by LEPs to deliver growth. LEPs need to prioritise construction and infrastructure. We are also pleased that the government have set aside an addition five billion pound investment to assist badly needed “shovel ready” infrastructure development across the UK, particularly in areas of the country outside of the South East.
‘The pressure is now really on to make delivery happen and the government clearly acknowledge the key role that construction can play in wider economic recovery. More development means more housing, more jobs and better infrastructure.’
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