How upcoming changes to business rates affect the commercial property market
Andy Noton, 21 January 2026
Andy Noton, 21 January 2026
Business rates are often a key consideration when acquiring or renting commercial property, and the business rates changes coming into force from April 2026, following the 2025 Autumn Budget, will have a direct impact on landlords, investors and occupiers.
These updates aim to create a fairer tax system, particularly focusing on sectors like retail, hospitality and leisure.
The Government said that these changes would help “the high street will benefit from permanently lower business rates for retail, hospitality and leisure, funded by higher rates for the most expensive properties such as warehouses used by large online retailers.”
The Valuation Office Agency (VOA) has updated the rateable values of all commercial properties in England and Wales.
These updated values will come into effect on 1 April 2026 and reflect changes in the property market.
The rateable value of a property is used by local councils to calculate business rates but is not the same as rent or the final bill.
A change in the rateable value doesn’t automatically mean bills will increase by the same amount, as the rateable value is multiplied by a Government-set multiplier, but there are concerns that many will see increases as a result of the changes.
Clearly the Government is concerned about this as it has allocated a £4.3 billion support package over the next three years. This includes:
Another major reform is the introduction of a new five-tier system for business rates multipliers to replace the current two-tier system with rates for small and standard rated businesses.
These rates, introduced from 2027, are likely to be as follows:
For 2026/27, the multipliers will see reductions for small businesses and standard properties, with even lower rates for qualifying RHL properties.
This sounds like great news at first, however, properties above £500,000 will face higher multipliers, in part to support relief at the lower end of the market.
For businesses, the changes provide opportunities for lower rates, especially for small businesses and those in retail, hospitality and leisure.
However, businesses with higher-value properties will see higher costs, particularly large office buildings, shopping centres and hotels.
Investors and landlords in these markets will need to assess how the new rates and relief schemes will affect property demand and valuations.
The upcoming changes to business rates, including the new five-tier multiplier system and support packages, will significantly impact how commercial properties are taxed in England and Wales.
A review of your rateable values ahead of April 2026 can help identify whether reliefs apply and whether your property may move into a higher business rates band.
For investors and landlords, understanding these changes early is key to assessing future costs, marketability and longer-term planning decisions.
Our property team advises on business rates planning, rateable value reviews and the financial impact of the new five-tier multiplier system. For tailored advice on how the reforms may affect your portfolio or premises, speak to our property expert and Partner, Andy Noton (andrewnoton@lubbockfine.co.uk)
