A practical guide for businesses looking at commercial property in Edinburgh
If you're looking at a shop, office, restaurant or other commercial property in Edinburgh, you'll normally see two figures fairly quickly.
The rent and the Rateable Value.
We get asked about the second one all the time.
If the rent is £20,000 a year and the Rateable Value is £18,000, does that mean you've got another £18,000 a year to pay?
No.
The Rateable Value is used to calculate your business rates. It isn't your actual rates bill.
Depending on the property and your circumstances, you may also qualify for rates relief which can reduce that bill considerably, sometimes to zero.
How are business rates calculated?
For 2026/27, Scotland has three rates, usually referred to as the poundage.
For properties with a Rateable Value up to £51,000, the Basic Property Rate is 48.1p for every £1 of Rateable Value.
Between £51,001 and £100,000, it's 53.5p.
Above £100,000, it's 54.8p.
So if you're looking at a property with a Rateable Value of £20,000, the basic calculation is:
£20,000 × 48.1p = £9,620 per year
That's the starting point before looking at any relief you might qualify for.
What would I actually pay?
Here are a few simple examples using the current 2026/27 Basic Property Rate:
| Rateable Value | Gross annual rates before relief |
|---|---|
| £10,000 | £4,810 |
| £12,000 | £5,772 |
| £15,000 | £7,215 |
| £18,000 | £8,658 |
| £20,000 | £9,620 |
| £30,000 | £14,430 |
| £50,000 | £24,050 |
That's why you shouldn't look at the Rateable Value on a property advert and assume that's what you're going to pay.
The next question is whether you qualify for any rates relief.
Small businesses may pay no rates at all
Scotland has a Small Business Bonus Scheme.
If you occupy a single qualifying property with a Rateable Value of £12,000 or less, you may qualify for 100% rates relief.
Take a property with a Rateable Value of £10,000.
The normal calculation would be:
£10,000 × 48.1p = £4,810
If you qualify for 100% Small Business Bonus relief, your rates payable after relief would be £0.
That's obviously a big difference when you're working out whether a property is affordable.
There is one important point to remember though.
You still have to apply for the relief.
Don't assume that because a property potentially qualifies for 100% relief, the council will simply know that you're entitled to it and your bill will automatically be zero.
When you take premises you'll have information showing the property's Rateable Value, but the relief depends on the ratepayer's circumstances as well as the property.
In Edinburgh, you can apply for Small Business Bonus relief through the City of Edinburgh Council.
So if we advertise a property as potentially qualifying for 100% rates relief, we're saying exactly that, potentially.
You still need to check that you qualify and make the application.
Never budget on the assumption you're getting rates relief until you've checked your eligibility and applied for it.
If you occupy more than one property, the rules are also different because the combined Rateable Value of the properties you occupy across Scotland can affect your entitlement.
What about shops, restaurants and hospitality?
There is also specific rates support in 2026/27 for qualifying retail, hospitality and leisure properties with Rateable Values up to £100,000.
Eligible properties can receive 15% relief.
Certain qualifying licensed hospitality premises and music venues can receive 40% relief.
There are eligibility conditions and limits, so again we'd always recommend checking rather than assuming a property qualifies.
What actually is the Rateable Value?
The Rateable Value isn't necessarily the rent you're paying your landlord.
Scotland had a business rates revaluation on 1 April 2026, with the new values based on rental levels at 1 April 2025.
The Assessor looks at the rental value of the property for rating purposes.
That's why the actual rent and Rateable Value can be different.
How do rates compare with the rent?
There's no fixed percentage.
You could be looking at a shop advertised at:
Rent: £25,000 per year
Rateable Value: £18,000
That doesn't mean the property costs £43,000 a year before you've even opened the door.
At the current basic poundage, an £18,000 Rateable Value gives a starting rates calculation of:
£18,000 × 48.1p = £8,658
You then establish whether you're entitled to any relief.
This is why we wouldn't compare commercial properties on rent alone.
Two properties with exactly the same rent can have very different overall occupation costs.
Business rates changed again in 2026
This is particularly relevant at the moment because Scotland's latest revaluation came into effect on 1 April 2026.
Some businesses will have seen their Rateable Value increase and others decrease.
The Scottish Government reduced the basic poundage to 48.1p at the same time, but that doesn't automatically mean everyone's rates bill went down.
If your Rateable Value increased substantially, your rates liability could still have increased.
There are transitional arrangements designed to limit some of the increases caused by the 2026 revaluation.
So if you're taking over a property, we'd look at the current Rateable Value and current rates position, rather than relying on an old rates bill or particulars prepared before the revaluation.
Who decides the Rateable Value?
The Rateable Value is set by the local Assessor.
The rates bill is dealt with by the local authority, so for a property in Edinburgh that's normally the City of Edinburgh Council.
The poundage used to calculate the rates is set nationally by the Scottish Government.
They all have slightly different roles, which is another reason the system can initially look more complicated than it really is.
What if you think the Rateable Value is too high?
That's another question we're likely to hear more following the 2026 revaluation.
There are specialist rating surveyors who can look at how a property has been valued, rental evidence, comparable properties and whether there may be grounds to challenge a valuation.
There are formal procedures and strict time limits involved.
We're going to cover this separately because Rateable Value challenges, proposals and the role of rating surveyors really deserve an article of their own.
Don't just compare the rents
This is probably the bit we'd want someone looking for premises to take away from this.
If you're choosing between a property at £20,000 rent and another at £22,000, don't automatically assume the £20,000 property is cheaper.
Look at the whole picture.
What's the Rateable Value? What are the likely rates payable? Do you qualify for Small Business Bonus or another relief? Is there a service charge? Who's paying the building insurance? What are your repairing obligations? Is VAT being charged on the rent?
Once you put everything together, the property with the slightly higher rent can sometimes be the cheaper property to occupy.
The rent gets your attention. The total cost of occupying the property is what really matters.
IME has been dealing with commercial property in Edinburgh since 1994.
If you're looking for commercial premises, we'll give you the information we have on the property and help you understand the questions worth asking before you agree terms.
Looking for commercial property in Edinburgh? Speak to the IME team.
Useful information
City of Edinburgh Council: Business Rates
https://www.edinburgh.gov.uk/business-rates
City of Edinburgh Council: Small Business Bonus Scheme
https://www.edinburgh.gov.uk/sbbs
Scottish Assessors Association: Valuation Roll
https://www.saa.gov.uk/
Scottish Government: Non-Domestic Rates
https://www.gov.scot/policies/local-government/non-domestic-rates/
Important: This is a general guide. Business rates and entitlement to relief depend on the individual property and the ratepayer's circumstances. Always check the current Rateable Value, rates liability and eligibility for relief before committing to premises.