Regeneration schemes could be stifled by government plans to limit an empty property renovation allowance, according to the British Property Federation.
HMRC has proposed a tightening of the business premises renovation allowance, which provides up to €20m (£16.8m) in tax relief for the redevelopment of empty buildings and brownfield sites in poorer areas.
Government fears that BPRA is being abused in some cases, with prelets not being disclosed or gross development value being quoted instead of construction costs to secure higher payments.
BPF director of policy Ian Fletcher said: “Limiting the scope of the relief could end up stifling potential development.
“The exceedingly slim chances of finding a suitable occupier for an empty building in economically disadvantaged areas and the size of repair costs compared to the building’s potential market value mean that such assets are rarely an economically viable project without some form of financial assistance.”
Meanwhile, the long-campaigned-for empty property rate relief for speculative new development took effect this week.
But the 18-month relief was met with a muted response by the industry. Montagu Evans head of rating Mark Higgin said: “It does not apply to refurbishments. So much for the government’s sustainability credentials, as it will increase the propensity to demolish.”
Nick.Whitten@estatesgazette.com
