The government has recently announced that from 1st October 2013, newly built commercial properties will benefit from a new empty property rate relief scheme.
At the moment, empty non-domestic properties are entitled to a three month or six month rate-free period. Under this new scheme, a qualifying property may benefit from a further 12 or 15 months of rate relief.
The risk of paying empty property rates, if the property is not fully occupied straight away, is a concern for developers. By introducing the new relief, developers' concerns should be alleviated and the government hope that the construction industry will regain its confidence.
Although the scheme is temporary, relief will be available for new properties that are:-
a) completed after 1st October 2013 and before 30th September 2016; and
b) unoccupied for the first 18 months after completion of their construction.
The policy is intended to capture properties that have been the subject of substantial structural construction and are not merely going through a renovation.
Local authorities will have the discretion to grant the relief. If the discretion is exercised, the government will reimburse the local authority for the amount of the discretionary relief applied. If the local authority unreasonably refuses to grant relief, the decision can be challenged.
The relief will attach to the property, meaning that if the property is sold and remains unoccupied, the new owner can benefit from the remaining term of the relief.
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Julie White is a Director and Head of the Commercial Property Department at BHW Solicitors in Leicester. Julie has over 25 years’ experience of commercial real estate transactions and regularly writes on commercial property issues. Julie can be contacted on 0116 281 6228 or by email at email@example.com.
Categorised in: Commercial Property, NewsTags: Commercial Property