Government aims to kick-start commercial building

Government aims to kick-start commercial building

The government will introduce a new tax incentive in order to stimulate greater commercial building activity.

Local government minister Brandon Lewis believes that offering a business rate discount to owners of unoccupied brand new warehouses, offices and factories is necessary if more projects are to be launched in the future.

At the moment, some organisations are reluctant to sanction the construction of new commercial structures for fear of being saddled with huge rates before they are able to find a tenant or buyer. 

There is a distinct shortage of sizeable warehouses in particular across the UK and this is holding back the logistics industry.

The government believes the reforms could be worth £150 million in the long run and as many as 11,000 new buildings could benefit in total.

Mr Lewis said: "This move will boost confidence in the commercial property sector and allow them to develop new projects again without worrying about the risk of rate bills on empty buildings while they find a buyer.

"This is the latest in a series of decisions by the government to address business rate concerns, help stimulate the construction industry and encourage economic activity across the country."

The tax relief will apply to properties completed between October 1st 2013 and September 30th 2016 and will cover the first 18 months after a complex has been signed off by builders.

It remains to be seen if this scheme will pave the way for more construction jobs in the UK, but it is certainly a step in the right direction.

With the economy starting to recover, the government is understandably keen to see more building developments being given the green light.

Earlier this month (September 8th), business secretary Vince Cable revealed that £150 million would be invested into the building industry over the next five years in order to reduce construction times, make buildings more efficient and improve the overall quality of projects.

Mr Cable underlined just how important the construction sector is to the nation's gross domestic product. It contributes a total of £90 billion to the economy and supports around three million jobs.

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