Months after the Autumn Budget, and with the government’s Call for Evidence: Business Rates and Investment underway, investors are still waiting for reform that addresses the structural barriers to property investment. Despite rhetoric around growth and modernisation, the practical operation of business rates continues to penalise capital expenditure, distort refurbishment decisions, and favour inertia over active repositioning.

For landlords navigating fragile occupational demand alongside tightening Environmental, Social and Governance (ESG) requirements, the disconnect between policy intent and tax reality is increasingly hard to ignore.

The Improvement Disincentive and Why the Current Relief Falls Short
Ministers now concede that improvements which raise rental or capital value also increase tax liability an “improvement disincentive” fundamentally at odds with objectives on decarbonisation, Minimum Energy Efficiency Standards (MEES), and town-centre renewal.

Improvement Relief, introduced in April 2024, was intended to soften this impact. In practice, it has barely registered. Local authority estimates suggest that only around £5m has been awarded across England negligible against the scale of investment required to future-proof the commercial property stock.