Consultation has begun on government plans to make property owners exempt from paying property rates on their vacant business units.
The proposals, originally announced in the Autumn Statement last year, will see less liability for property owners if their buildings are not occupied. However, this will apply only to properties built between October 1st 2013 and September 30th 2016 and only if the site is left empty in the first 18 months after construction.
Currently, if a building is empty, owners do not have to pay rates for up to three months, industrial sites have six months of relief, and any building valued at less than £2,600 remains exempt until it is occupied again. The proposals suggest that these regulations will not be changed, but local authorities will be funded so that they can offer further relief.
While many industry experts have praised the changes, property law expert Stuart McCann of Pinsent Masons suggests caution: "Expect calls for a longer exemption period being needed to really stimulate speculative development because the risk for developers of empty property rates liability will remain high." says McCann "If the policy is introduced as currently planned it will probably only have a material effect on smaller developments, because the viability of larger developments will still depend primarily on the key factors of confidence and finance."
The consultation continues.