When a commercial property undergoes a significant change in rateable value (RV) following a national revaluation, the impact on business rates can be substantial. To protect landlords and occupiers from sudden spikes or drops in liability, the UK Government applies transitional relief limits, which phase in changes to business rates over time.
For commercial landlords, understanding transitional relief limits is key to forecasting holding costs, managing tenant expectations, and avoiding overpayment across your property portfolio.
At Fraser Bond, we support landlords in navigating complex rating systems, securing accurate assessments, and managing transitional adjustments across diverse asset classes.
Transitional relief is a government policy that limits how much a property's business rates bill can increase (or decrease) year-on-year following a revaluation. This scheme helps ratepayers adjust gradually to new RVs and is applied automatically by local authorities.
It ensures:
Increases in rates bills are capped for properties facing steep RV hikes
Decreases in rates bills are phased in for properties whose RV has dropped significantly
Relief applies to the net chargeable amount, not the rateable value itself, and is recalculated annually over a transitional period (typically 3 years).
The most recent business rates revaluation took effect on 1 April 2023. The transitional relief limits for 2023–2026 in England are based on property size, defined by rateable value bands:
Upward Cap (Increases Limited To):
5% in Year 1 (2023–24)
10% in Year 2 (2024–25)
25% in Year 3 (2025–26)
Downward Cap (Reductions Phased):
15% in Year 1
20% in Year 2
25% in Year 3
Upward Cap:
15% in Year 1
25% in Year 2
40% in Year 3
Downward Cap:
10% in Year 1
15% in Year 2
20% in Year 3
Upward Cap:
30% in Year 1
40% in Year 2
55% in Year 3
Downward Cap:
5% in Year 1
10% in Year 2
15% in Year 3
Note: Percentages apply before other reliefs (e.g. SBRR or empty property relief) and are based on 2023–24 baseline liabilities.
Landlords can plan for incremental rate increases, especially where properties have experienced significant RV uplifts due to market trends or upgrades.
Understanding relief limits allows for accurate service charge and rent planning in properties where tenants pay business rates.
When managing vacant units or properties temporarily out of use, transitional relief affects how soon cost savings are realised—especially after a rateable value drop.
Large-scale landlords may experience differing caps across property types and regions, impacting overall investment performance.
Fraser Bond provides strategic support to commercial landlords across London and the UK by:
Reviewing property portfolios for transitional relief implications
Assisting with VOA checks and rateable value challenges
Advising on lease structuring to reflect phased increases
Coordinating with billing authorities and surveyors
Managing appeals, exemptions, and phased charge monitoring
Whether you own retail, industrial, leisure, or mixed-use assets, our team helps ensure your rates liabilities align with operational strategy and market realities.
If your commercial properties have been revalued under the 2023 rating list, transitional relief limits may apply to soften cost changes. Fraser Bond can help you understand, project, and optimise your business rates exposure.
Visit FraserBond.com to speak with our business rates advisory team today.
