BCIS data and business rates revaluation 2026

The revaluation

From 1 April 2026, the rateable values of all business properties in England will be updated by the Valuation Office Agency (VOA) to reflect the property market as at 1 April 2024. The previous valuation was at 1 April 2021.

Organisations can use the VOA’s online service to:

• find out what their rateable value will be from 1 April 2026
• estimate their business rates bill for the 2026/27 tax year.

As well as viewing the proposed valuation, organisations can challenge a property’s rateable value if they think it’s wrong.

For most properties, the valuation is based on an estimate by the VOA of the property’s open market rental value on 1 April 2024.

Contractor’s Basis of valuation

There are specialised buildings that do not have an open market rental value, for example larger industrial buildings and public buildings, universities, etc. For these, the ‘Contractor’s Basis of valuation’ (depreciated replacement cost) can be used. For this, the following BCIS tools and data could prove useful:

• Average Building Prices
• Cost Analyses
• Schedule of Rates
• Tender Price Indices
• Location factors
• Plant and Equipment Indices
• Component life

The overall aim of the Contractor’s Basis is to arrive at the effective capital value (ECV) that is then converted into annual rental value. The primary method of arriving at ECV is to consider replacement building costs suitably adjusted.

The first stage of the Contractor’s Basis is to estimate what it would cost to construct the property, including all the buildings, site works, and all rateable structures and rateable plant and machinery within the property, on an undeveloped site.

Stage 1 – Estimate the replacement cost of the site works, buildings, rateable structures and rateable plant and machinery.

Stage 2 – Apply any appropriate adjustments and allowances to reflect the difference between cost and effective capital value (ECV).

Stage 3 – Add the value of the land to arrive at total ECV.

Stage 4 – Apply the appropriate decapitalisation rate to the total ECV.

Stage 5 – Stand back and look at the result of Stage 4 and make any further adjustments considered appropriate.

The estimated cost of replacement should include all of the elements that would make up an actual cost. Design costs, site works, provision of services and supervision costs (including fees) should all be included in the estimated replacement cost. In most cases, costs will relate to the actual property, but there may be cases where it would be appropriate to cost a modern, simpler or smaller substitute.

The estimate of the replacement cost can be achieved either by:

• reference to historical records of the actual cost of constructing the building or structure and acquiring plant and equipment.
• reference to other appropriate and reliable sources of cost estimates. Unit costs based on competitive rates prevailing at the valuation date.

If the original cost of the building, structure or plant and equipment is available, the cost information will need to be adjusted to correspond with the valuation date. BCIS has different indices for buildings, civils, and plant and equipment, etc. that could be used, although care needs to be exercised to ensure that an appropriate index is applied.

If unit costs are used, the valuer will also need to adjust for any difference in cost levels between the location of the property being valued and the source of the cost information.

Adjusting for current condition

The costs estimated relate to the provision of new buildings, structures, and plant and equipment, etc. As it is the actual property that has to be valued in its existing physical state, adjustments should be considered at this stage. This is to reflect certain deficiencies in comparing the actual property with the ‘new’ property that forms the basis of the estimate.

These include:

• ‘Physical obsolescence’ – this relates to the deterioration of the buildings, or other parts of the property, through the wear and tear of the components.
• ‘Functional obsolescence’ – this relates to the problems that may be present in the design of the property, which could be deficient by comparison with current requirements.
• ‘Technological obsolescence’ – this arises where current technology has evolved to such an extent that the actual buildings or plant to be valued have become significantly redundant or economically outmoded.

Further guidance

The Contractor’s Basis of valuation for rating purposes, RICS Professional standard, global, 2nd edition, August 2017 (amended September 2023) gives a detailed description of the process.

BCIS Services

BCIS CapX contains:

• Average Building Prices
• Cost Analyses
• Tender Price Indices
• Location factors
• Schedule of Rates

BCIS OpX contains:

• Component life
• Plant and Equipment Indices

BCIS TotX contains all of the above.

References/sources

The Contractor’s Basis of valuation for rating purposes, RICS Professional standard, global, 2nd edition, August 2017 (amended September 2023)

Rating Manual section 4: valuation methods, Part 3: the contractor’s basis of valuation, The Valuation Office Agency’s (VOA) technical manual for the rating of business (non-domestic) property.

From: Valuation Office Agency

Published: 5 May 2017, updated 2 January 2025