Budget 2025: A Status-Quo Budget for Business Rates

Despite significant anticipation around business-rates reform, today’s Autumn Budget delivered only a brief mention, and very limited new detail.

For landlords, occupiers and investors, the message is largely one of continuity rather than change, with the Government confirming previously trailed measures rather than unveiling substantive fresh business rates reforms.

Below, Adam Barnfield, Partner and Head of Business Rates, outlines what has been announced, what it means, and the wider implications for commercial property taxation ahead of the publication of the 2026 Draft Rating List.

Permanent Retail, Hospitality & Leisure rating cut welcome

The main business rates announcement in the Budget, was confirmation of a permanent rates cut set to benefit more than 750,000 retail, hospitality and leisure (RHL) businesses.

“Although the Budget speech offered scant detail, this is expected to be delivered through the proposed new lower business-rates multiplier for RHL, which would represent the lowest multiplier since 1991, according to the Chancellor.

“For high-street businesses and hospitality operators, this provides welcome stability and a reduction in ongoing occupational costs. This may also help support occupancy levels on the high street and investment in local town centres,” explained Adam.

New ‘super multiplier’ for high-value properties

The cost of the permanent RHL support will be offset by a new ‘super multiplier’, applied to properties with a rateable value (RV) above £500,000.

This enhanced band will capture:

• Large offices
• Large industrials
• Online warehouse/fulfilment centres

Whether properties, such as out-of-town retail, major leisure and educational will be exempt, is still yet to be determined.

£4.3bn Transitional Relief package nothing new

The Chancellor also confirmed a £4.3 billion package to support ratepayers facing significant increases at the next revaluation.

Adam explains: “This is simply a continuation of the existing Transitional Relief Scheme, originally introduced as a temporary measure many revaluations ago, and now an entrenched feature of the system.

Transitional relief is designed to limit how much a business’ rates bill can increase in any one year after a revaluation. It phases changes in gradually.

If a property’s rateable value jumps significantly in the 2026 Rating List, transitional relief prevents the occupier from suddenly having to pay the full, higher bill in year one. Instead, the increase is capped and spread over several years.

“While transitional relief will help soften the sharp increases in liability post-2026, it also serves to prolong the distortions within the system and delays convergence to true liability for some occupiers.”

A status-quo Budget

Business rates received a passing mention in the Chancellor’s speech, with no surprises, no acceleration of reform, and almost no substantive commentary. It was effectively a status-quo Budget for business rates.

For the commercial property sector, the message is clear: the long-term overhaul many stakeholders had hoped for has not materialised, and today’s measures simply reaffirm the direction already set through the 2025 legislative changes.

More detail is expected once the draft 2026 Rating List is published imminently, including the actual multipliers for 2026–27.

Wider Property Taxation: A “Mansion Tax” in all but name

While non-domestic rates saw little new movement, the Budget did introduce a significant development on the residential side. A council-tax surcharge for high-value homes, effectively amounting to a form of mansion tax.

The surcharge will apply to properties in Bands F, G and H after a fresh revaluation, with the following annual charges:

• £2,500 surcharge for homes valued £2.5m–£10m
• £7,500 surcharge for homes valued above £10m

This raises a number of important questions for homeowners, developers and advisers alike.