Introduction of new build empty property relief on 1 October 2013Print publication
The new build empty property relief is available at the discretion of the relevant local authority under the powers granted to it at section 47 of the Local Government Finance Act 1988. The qualifying criteria are as follows:
the property must be an unoccupied, non-domestic property comprised wholly or mainly of qualifying new structures; and
the construction of the property must have been completed after 1 October 2013 and before 30 September 2016 and less than 18 months prior to the date of the granting of relief.
At present, what will amount to wholly or mainly qualifying new structures is ambiguous. The Government has acknowledged the need for clarity in its summary of consultation responses and notes that guidance will be issued to provide such further clarification, but has at this point stated that, whilst not intended to capture empty properties under refurbishment, the relief is intended to apply to those properties that have been the subject of substantial structural work. They have given the example that those properties that are built on existing foundations or around a retained facade are likely to benefit.
The relief will attach to the property as opposed to the proprietor of the property, meaning that the benefit of the relief may pass on the sale of the property, provided that the ratepayer has not reached the state aid de minimis limits.
Whilst this relief has been expressed by the government to be designed to encourage construction, it has come under heavy criticism in the consultation period for being for the most part inapplicable to empty properties under refurbishment. The British Property Federation have commented that they consider it to be limited in scope and needlessly complex and that as a result it will do “next to nothing to stimulate development”.