Last month (June 2013), the Government launched its six-week consultation period into the proposed short-term empty property rates (EPR) exemption of all new build commercial property developments completed between 1 October 2013 and 30 September 2016, following the Chancellor’s original announcement in his 2012 Autumn Statement.
How will this benefit a provincial City such as Bradford?
The relief is proposed to be available for an 18 month period only and the maximum relief is said to be around £55,000 pa.
The scheme is subject to the normal European State Aid rules (€200,000) limiting each company to a total of £165,000 over three years or £55,000 per year. This is nowhere near enough to encourage significant sized new developments.
As an example, a 20,000 sq ft new build flexible office space centre in Bradford will have an annual rates bill of circa £90,000. The proposed relief will not make a huge difference to the prospects of the development taking place.
The proposals do nothing to stimulate the market for the large number of empty offices in places such as Bradford, which are proving very hard to let due to lack of demand. However, these same properties could be converted into flexible space locations, let on easy in easy out flexible terms and geared specifically towards creating space for the growing number of small and start-up businesses.
It would be good if the Government could be persuaded to reinstate the £18,000 Rateable Value threshold below which no rates were payable on vacant commercial premises which was reduced to £2,600 back in 2009-2010.