Despite an air of expectation in the property industry, the Chancellor failed to deliver any radical changes to the inequalities of the rating system and the imposition of rates on empty buildings.
Chancellor George Osborne announced in December 2012 that “all newly built commercial property completed between 1 October 2013 and 30 September 2016 will be exempt from empty property rates for the first eighteen months, up to the state aids limit and subject to consultation”.
Whilst this specifically targeted relief from empty rates is welcome there is a general view that the coalition is still tinkering around the edges and is not prepared to reverse the last government’s disastrous imposition of rates on empty buildings. “Too little, too late” is the overriding sentiment with the Chancellor failing to take notice of a powerful body of evidence that has been submitted to the Treasury over the last twelve months.
The minor changes announced do not remove the inherent problems that landlords and investors currently face in having to pay empty rates on existing stock. This, coming on top of the recent decision to postpone the business rates revaluation until 2017, is causing real hardship to both landlords and tenants.
On a more positive note, the Chancellor announced that he is extending the temporary doubling of the Small Business Rate Relief scheme for a further twelve months from 1 April 2013. Just over half a million small businesses will benefit from this, with approximately 350,000 not paying any business rates until April 2014.
This is the 4th time that this relief has been extended for just a short and temporary period which, although again welcome, does only provide temporary respite and makes it difficult for SMEs to budget for the future.
All in all a disappointing budget for the property industry.