Exemption from Business Rates - New properties in Scotland

The Scottish Government has confirmed a proposal that business rates will not be charged on commercial properties in Scotland until one year after the property is occupied by its first tenant following a review of Business Rates in Scotland.

The drive of this is to facilitate business growth and the Finance Secretary, Derek MacKay,  has announced that he will include the proposal in the government’s draft budget for 2018/19 with a view to implementing it for all new-built properties on 1 April 2018.

Gilson Gray LLP welcomes the proposals for (a) property developers and (b) the new occupiers as hopefully the changes will act as a positive catalyst for speculative development and business investment within Scotland.

The proposals also confirm that any rates increase due on newly-improved commercial properties would be frozen for one year. This will hopefully encourage owner development which again facilitating business growth and investment.

There were a total of 30 recommendations made by the review which include:-

1. A shift to three-yearly revaluations
2. 100% rates relief for day nurseries; and
3. expanding the ‘fresh start’ relief scheme, to create a greater incentive to bring empty properties back into economic use
4. empty property rates relief reform

The Finance Secretary has noted that some of the recommendations require “further consideration and engagement”, but appears to have a clear focus on business investment and development with two key comments being:-

“The Barclay Review presented us with the opportunity to evaluate how we handle business rates and improve methods to make Scotland the most competitive place in the UK for businesses to invest and grow,”

“These new measures will help stimulate the economy and create jobs, which is key to readdressing the inequality that still exists in our society as well as strengthening Scotland’s business appeal and generating new growth avenues,”

The majority of non-domestic premises including shops, offices, warehouses and factories are charged Business Rates and the current regulations typically provide for a revaluation every 5 years.

After 2022 the Scottish government will move to three-yearly revaluations which the Finance Secretary has said that these changes would “help ensure that our ratings system is more flexible to the changing economic circumstances that businesses face”, again reiterating the focus on business investment and development.

At Gilson Gray LLP we have a focus on supporting our clients on strategic acquisitions and developments and the changes in Rates will be a considerations for this. Please contact our Real Estate Team headed by Murray Stewart for further discussion.

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Gregor Duthie
Mobile: 07841 022651
Direct Dial: 0141 433 7753
Email: gduthie@gilsongray.co.uk 

For More Information Contact:
Murray Stewart
Mobile: 07920 866 998
Direct Dial: 0131 516 5370
Email: mstewart@gilsongray.co.uk

Donna Kelly-Gilmour
Mobile: 07956 177 541
Direct Dial: 0141 530 2043
Email: dkellygilmour@gilsongray.co.uk

John Fulton
Mobile: 07487 801 616
Direct Dial: 0141 433 7759
Email: jfulton@gilsongray.co.uk 

Iain Witheyman
Direct Dial: 0131 516 5358
Email: iwitheyman@gilsongray.co.uk 

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The information and opinions contained in this blog are for information only. They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice. Before acting on any of the information contained in this blog, please seek specific advice from Gilson Gray.