The Green Members of the Scottish Parliament have proposed closing a tax loophole on vacant commercial property, in the run up to Holyrood voting on the 2011-12 Scottish Budget.

Empty business premises attract substantial discounts on Universal Business Rates – the equivalent of Council Tax for commercial property. Generally, this means paying no rates at all for the first three months, then only half rates thereafter.

Patrick Harvie is proposing that Scotland should make the same changes made by England in the Rating (Empty Properties) Act 2007, giving vacant properties a 50% discount for the first six months, then levying the full value of business rates.

We’ve seen the search for new sources of revenue to reduce the impact of ConDem cuts emerge as the theme of the Green MSPs’ approach to this Budget, and it appears likely to continue as a central plank of the election campaign. In this Budget process, the Greens have also argued against a national Council Tax freeze, and for a hotel bed tax, as well as the Green flagship of Land Value Tax.

The changes proposed by the Greens could raise over £75m per year, or around 6% of the £1.3bn Budget cut imposed on Scotland by George Osborne.

In addition to the cuts-blunting potential of the move, it would have the effect of discouraging the land-banking of empty properties, getting them onto the market ad back in the hands of active businesses sooner. This could be expected to reduce the cost of business start-up and expansion, stimulating economic recovery.