Chancellor Gordon Brown said that he was going to curb tax relief on commercial property that is lying empty.
He told the Commons that empty commercial property should not continue to be given generous business rate relief because this leads to higher rents in areas with highest demand, such as Glasgow, Edinburgh, and London.
Empty property relief has also been identified as a barrier to UK competitiveness.
Under the measures announced yesterday, the government will restrict the relief available for empty industrial properties to six months, and for empty offices and retail to three months. There will be special exemptions for charities.
A move to curb tax relief on vacant commercial property was recommended by the Barker Report on property supply and the Federation of Small Business.
The Local Government Minister Phil Woolas said later that the government would legislate "as soon as possible" to remove business rate relief on property lying empty.
Critics of tax relief on empty property said landlords were able to let their holding sit idle for years while collecting tax breaks. They said the new measures would force these landlords to sell or develop their property and this would assist regeneration efforts in city centres and other areas.
According to The Empty Homes Agency, there is enough empty commercial property to create 420,000 new homes across Britain.
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