Scotland deputy first minister John Swinney has committed to capping next year’s business rates increase to 2% instead of the traditional September RPI figure.
Swinney also unveiled a £618m rates relief package, claiming Scotland would have “the most competitive business tax environment in the UK”.
The news was welcomed by the Scottish Property Federation, although the organisation warned that continuing to increase the tax by RPI every year is leading to unsustainable levels of property taxation.
It called on the Scottish government to reform the business rates system in order to make it fairer.
The SPF plans to consult with the industry on proposals such as charging fees for appeals when a number of these issues are raised in the valuation appeals consultation.
John Hamilton, chairman of SPF, said: “Rates are now a major burden on businesses and property investors so we welcome strongly the decision by John Swinney to limit their annual increase.
“Rates have a direct impact on rental values and are now at a level where they seriously affect the willingness of companies to invest in business premises. After 25 years it is time for reform, more regular revaluations and a fairer reflection of the true commercial property market for ratepayers so we are calling for wide-ranging reform of this major annual business tax.”