Landowners in Scotland, already reeling from the implications of the new land reform bill being brought in by the Scottish Government, are facing another looming deadline which will have a major impact on the business rates regime.

In a bid to bring empty properties back into economic use, the Scottish Government devolved administration of tax relief on such assets to individual local authorities on April 1 last year, and now councils are bringing changes into effect.

From April 1 this year, for instance, Edinburgh City Council has approved changes which effectively mean that business premises and empty commercial land sites will be liable for full non-domestic rates if they are unoccupied for more than a year.

The relief regime that applied nationally up until this point varied to a degree, with some owners of empty properties enjoying 100% relief for many years, while others were supported with 50% relief on business rates for three months, 100% relief on industrial properties for six months, followed by 10% thereafter. 

Aberdeen City Council has reduced empty property relief on industrial properties to now align with all commercial properties in that they will receive only three months relief at 50%, as opposed to six months at 100% relief. Borders Council and others are also implementing changes.

Under the new policies, exemption will only be available for empty properties which are prohibited from being occupied by law, for example, where asbestos removal is being carried out.

The repercussions of the amended policies will be far-reaching. While no landowner wants to sit on an empty property, or parcel of land, for any length of time when it could be generating a return, there are often valid reasons for being unable to source a suitable tenant or buyer.

Reliefs, which have been in place for decades, are now being arbitrarily removed – with no right of appeal – and property professionals who might have been able to sit out void periods will now most likely face enforcement orders.

The impact on banks of development land – so necessary for the creation of pipelines of much-needed housing – has yet to be fully appreciated.

However, it seems clear that the changes will bring more land and properties onto the market. While this will ease the chronic shortage of stock, particularly in the Central Belt and Fife, it is not likely to unlock a new tranche of occupiers, otherwise the assets in question would not have been empty in the first place.

As ever, land and property owners are faced with another set of challenges, seen as they appear to be by the authorities as soft targets, and professional advice is more necessary than ever.

DM Hall is one of the few professional services firms in Scotland with a long-established and dedicated rural business division, which stands ready to help.

Jennifer Campbell is a property professional in the Rural Services division of DM Hall Surveyors.

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