Question 1

How are business rates calculated?

Accepted Answer

Business rates are the rateable value set by the Valuation Office Agency multiplied by the multiplier set by government, less any reliefs. On a standard letting the occupier pays, not the landlord. Use our Business Rates Calculator to estimate a bill.

Question 2

What are the 2026 business rates multipliers?

Accepted Answer

From 1 April 2026 there are five multipliers: small business (non-RHL) 43.2p, standard 48.0p, small RHL 38.2p, standard RHL 43.0p, and a high-value multiplier of 50.8p for rateable values of 500,000 or more.

Question 3

Do I pay business rates on an empty commercial property?

Accepted Answer

There is a rate-free window of three months (six for industrial). After that the owner pays full rates, with no SBRR or RHL relief. Properties below 2,900 rateable value and listed buildings are exempt while empty.

Question 4

How do I appeal my rateable value?

Accepted Answer

Through the Valuation Office Agency's Check, Challenge, Appeal process: register and claim the property, submit a Check to correct the facts, then a Challenge with evidence, and finally an appeal to the Valuation Tribunal.

Question 5

What is security of tenure under the 1954 Act?

Accepted Answer

Part II of the Landlord and Tenant Act 1954 gives most business tenants a right to renew their lease unless the landlord opposes on statutory grounds. It can be excluded by contracting out before the lease starts.

Question 6

Can I get my property back at the end of a commercial lease?

Accepted Answer

Only if you oppose renewal on one of the section 30 grounds, most commonly redevelopment (ground f) or your own occupation (ground g). You must show a genuine, settled intention, and the tenant may be entitled to compensation.

Question 7

Is the upward-only rent review ban in force?

Accepted Answer

No. The ban is legislated in the English Devolution and Community Empowerment Act 2026 (Royal Assent 29 April 2026) but is not yet in force, with commencement expected around 2027 to 2028. It is not retrospective, so existing leases keep their upward-only clauses.

Question 8

How do I recover commercial rent arrears?

Accepted Answer

Options include Commercial Rent Arrears Recovery (CRAR), which takes control of the tenant's goods after a 14-day notice, forfeiture, drawing on a rent deposit, and pursuing guarantors. Using CRAR waives the right to forfeit for that arrears.

Question 9

Does Section 24 apply to commercial property?

Accepted Answer

No. The Section 24 finance-cost restriction that hit residential landlords does not apply to commercial property. Loan interest is fully deductible against commercial rental profit, whether you own personally or through a company.

Question 10

How much SDLT do I pay on commercial property?

Accepted Answer

Non-residential SDLT is 0% up to 150,000, 2% to 250,000 and 5% above, with no additional-property surcharge. A new lease is also charged on the net present value of the rent. Scotland uses LBTT and Wales uses LTT.

Question 11

Do I charge VAT on commercial rent?

Accepted Answer

Rent is exempt from VAT by default, so no VAT is added, unless you have opted to tax, in which case 20% applies. A VAT-registered tenant can usually recover it; an exempt tenant such as a charity or bank cannot.

Question 12

Is tax on commercial rental income changing?

Accepted Answer

Yes. From 6 April 2027, income tax rates on property income rise by two percentage points, to 22%, 42% and 47% for individual landlords. This was announced at the Autumn Budget 2025.

Question 13

What capital allowances can I claim on commercial property?

Accepted Answer

The Annual Investment Allowance gives 100% on qualifying plant up to 1,000,000 a year. Companies can use full expensing on new main-rate assets (not leased), and a 40% first-year allowance covers leased assets. Structures get a 3% Structures and Buildings Allowance.

Question 14

What EPC rating do I need to let commercial property?

Accepted Answer

The minimum is EPC E, in force since 1 April 2023. A property rated F or G cannot be let without a registered exemption. Penalties run from up to 50,000 to up to 150,000 pounds by rateable value.

Question 15

Is EPC C by 2027 or EPC B by 2030 the law?

Accepted Answer

No. Both were withdrawn. The only live proposal is EPC B by 2031 for buildings over 1,000 square metres, and that is announced, not law, as it needs secondary legislation. Buildings under 1,000 square metres stay at EPC E.

Question 16

Should I upgrade the EPC or accept the void?

Accepted Answer

It depends on the cost of works against the rent at risk, the void if it cannot be let, penalties and energy savings. Model the payback and net present value before deciding.

Question 17

What yield should I expect on commercial property?

Accepted Answer

It varies by sector, covenant and lease length. Prime industrial trades at keen yields, secondary offices higher. What matters is the net initial yield against the price plus purchaser's costs, and the reversion.

Question 18

How do commercial mortgages differ from buy-to-let?

Accepted Answer

Commercial mortgages typically offer lower loan-to-value (often up to 65 to 75%), are priced on the income and covenant, and are tested on interest cover, commonly 130 to 150%, stress-tested at a higher rate.

Question 19

What is a sale and leaseback?

Accepted Answer

An owner-occupier sells the property to an investor and takes a lease back, releasing capital while staying in occupation. The buyer gets an instant tenant, but the income depends entirely on the seller-tenant's covenant.

Question 20

What are my compliance duties as a commercial landlord?

Accepted Answer

Depending on the lease, duties can cover fire safety, asbestos, electrical (EICR), water (legionella), gas, MEES and accessibility. On a full repairing lease more falls to the tenant, but the landlord usually retains the common parts and structure.

Question 21

Do commercial buildings need a fire risk assessment?

Accepted Answer

Yes. Under the Fire Safety Order 2005, the responsible person, usually whoever controls the premises, must carry out and maintain a fire risk assessment and put appropriate precautions in place. Mixed-use buildings with homes can carry extra duties.

Question 22

Can I hold commercial property in a pension?

Accepted Answer

Yes. A SIPP or SSAS can hold genuine commercial property, with rent received tax-free in the scheme and no CGT on disposal within it. Your own business can rent the premises, on arm's length terms. Residential property is effectively off limits.

Question 23

How does the 2027 pension IHT change affect commercial property?

Accepted Answer

From 6 April 2027, unused pension funds, including commercial property held in a SIPP, are expected to be brought into the estate for inheritance tax, reducing a key benefit of holding property in a pension.

Commercial Property FAQ

Business Rates

Commercial Leases

Tax & VAT

MEES & Energy

Buying & Investing

Compliance & Safety

SIPP & Pensions

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