The Scottish Government delivered its 2026–27 Budget on 13 January 2026, with a range of measures affecting ratepayers.
Non-domestic rates: multipliers reduced
One of the headline changes in the Budget is the reduction of non-domestic rate multipliers for the 2026/27 financial year:
- Basic Property Rate reduced to 48.1p [was 49.8p]
- Intermediate Rate reduced to 53.5p [was 55.4p]
- Higher Rate reduced to 54.8p [was 56.8p]
This decision aims to provide some relief to businesses following the recent three-year revaluation cycle.
Revaluation Transitional Relief
To ease the impact of revaluation increases, the Scottish Budget introduces a Transitional Relief framework, capping the growth in net liabilities (on a cash basis) over three years based on property size:
| Category | 2026/27 | 2027/28 | 2028/29 |
| Small | 15% | 22% | 38% |
| Medium | 30% | 44% | 75% |
| Large | 50% | 75% | 113% |
For example, small properties will have increases capped at 15% in 2026/27, rising to 38% by 2028/29 — cushioning ratepayers from potentially sharp jumps in bills after revaluation.
Small Business Transitional Relief (SBTR)
The Budget also introduces Small Business Transitional Relief for ratepayers losing existing reliefs, phased over three years:
- 25% of the increase in 2026–27, rising to
- 50% in 2027–28, and
- 75% in 2028–29.
This is designed to smooth the transition for businesses no longer eligible for previous small business support.
Small Business Bonus Scheme (SBBS) changes
The existing Small Business Bonus Scheme (SBBS) will be maintained at current thresholds for the next three years, but with several notable changes:
- Shootings and deer forests are excluded from eligibility from 1 April 2026 — except where the use is solely for deer management or within certain agricultural tenancies.
- Payday lenders, betting shops, and certain property categories remain ineligible for SBBS relief.
- From 1 April 2026, only short-term let premises with a valid licence will qualify for SBBS.
Ineligible categories will also be barred from Fresh Start relief after this date.
Retail, Hospitality and Leisure (RHL) Relief
The Budget includes 15% relief for retail, hospitality and leisure sectors in 2026–27 (for properties with rateable values up to £100,000), capped at £110,000 per business per year. The relief is extended to island and remote areas, with 100% relief for eligible properties there for the full revaluation cycle.
Electric Vehicle Charging Relief
To support the transition to electric transportation, eligible EV charging infrastructure will receive 100% business rates relief for 10 years from 1 April 2026 — reinforcing Scotland’s green policy commitments.
Transitional controls and subsidy rules
All non-domestic rates reliefs outlined in the Budget are framed within the domestic subsidy control regime under the UK’s Subsidy Control Act 2022, meaning they must comply with current national subsidy limits and notification requirements.
Council tax overhaul for high-value properties
In a significant shift for local taxation, the Scottish Government will introduce new Council Tax bands from 1 April 2028 — targeting the most expensive homes:
- Band I: Properties valued between £1 million and £2 million
- Band J: Properties valued above £2 million
These bands will be based on up-to-date property values, while the rest of Scotland remains on the traditional 1992 valuation framework.
The Budget also proposes lifting the legislative cap on Council Tax premiums for second homes and long-term empty properties (subject to parliamentary approval), giving local authorities greater freedom to set their premiums.