Business rates for nurseries: key facts
- Day nurseries are usually valued by rental comparison: a price per m² from nursery rents, multiplied by the net internal area.
- For the 2023 list the VOA analysed nursery rents per registered child place; its 2026 practice note says the 2026 list uses £ per m² instead.
- The VOA records outside play areas, car parking, fencing and gates, heating, air conditioning and CCTV, as well as registered places and recent Ofsted or Estyn inspections.
- Nurseries and creches are not retail, hospitality or leisure for the English multipliers, so they pay 43.2p (RV under £51,000) or 48p (£51,000 to £499,999) in 2026/27, plus a 1p supplement for many.
- England has no nursery-specific relief at present; small business rate relief and, for charity-run nurseries, charitable relief of up to 80% are the main reliefs.
- In Wales, the Welsh Government gives 100% relief to registered childcare providers through small business rates relief, and the two-properties limit doesn't apply to them.
- Nursery classes that are part of a primary or all-age school are assessed with the school, not as a separate nursery.
- You can check and challenge your nursery's rateable value free through your business rates valuation account, or a rating surveyor can do it for you.
How does the VOA value a day nursery for business rates?
The VOA usually values day nurseries by comparing rents. It analyses rents paid for nurseries in the area, works out a price per square metre of net internal area, and multiplies that by your nursery's floor area. It also takes account of the building's design, how it's used and its location.
Your rateable value (RV) is meant to be the yearly rent your nursery premises could have let for on 1 April 2024, assuming the building is empty, in reasonable repair and let on the tenant paying rates, repairs and insurance. It is not your actual rent, and it isn't based on your fees or profits (that is the approach used for pubs and larger hotels, not nurseries).
The VOA's own rating manual for day nurseries, nursery schools and other day care facilities for under fives sets out what its valuers do:
- Survey the premises: a plan, the construction, the floor area room by room, heating, air conditioning, security (CCTV, barriers, gates, perimeter fencing), solar panels, parking, landscaping and outside play areas.
- Find out how it runs: the type of childcare, the age profile and number of registered children, and recent Ofsted (England) or Estyn (Wales) inspections. Your own website is one of the places the VOA says it can look.
- Analyse local nursery rents into a price per m² of net internal area, grouped into a valuation scheme.
- Apply that price to your area, reflecting the design, layout, quality and location of your nursery.
The list description is usually "Nursery and Premises" or "Nursery School and Premises". If yours says something else, such as a shop, office or hall, it's worth checking why.
Is a nursery valued on its number of places or its floor area?
For the 2026 rating list the VOA's practice note says rents are analysed and valuations made in pounds per square metre of net internal area. For the 2023 list it analysed rents per registered child place. Registered places and space standards still matter, because they show how well the building works as a nursery.
This is one of the main things that sets nurseries apart from other property types, and it changed between the last two revaluations:
| Rating list | How the VOA analysed nursery rents |
|---|---|
| 2023 list (valuation date 1 April 2021) | Rent per registered child place (as registered with Ofsted). Local VOA teams could use £ per m² instead if it fitted the local market better. |
| 2026 list (valuation date 1 April 2024) | £ per m² of net internal area, for the large majority of stand-alone day nurseries. |
So if you compare your 2026 valuation with your 2023 one, you may be comparing two different methods. A nursery with a lot of floor space but relatively few places, for example in a rambling converted house, could be affected differently from a compact purpose-built nursery.
Why the space standards still matter
The VOA tells its valuers to consider the quality and adequacy of the accommodation against the early years space requirements. The indoor standards it quotes are:
- Children under two: 3.5 m² per child
- Two-year-olds: 2.5 m² per child
- Three to five-year-olds: 2.3 m² per child
Those figures are based on the usable area of rooms the children use, not storage, corridors, staff areas, cloakrooms, utility rooms, kitchens or toilets. Space that can't count towards your registered places still forms part of the building, but it's relevant to how efficient the building is as a nursery, and that is part of what a tenant would pay for.
Does it matter if my nursery is purpose-built or a converted house?
It can. The VOA accepts that day nurseries can be in purpose-built or converted buildings, and it says nursery rents reflect the design and layout of each building as well as its location. A converted house with small rooms, stairs and corridors works differently from a single-storey purpose-built unit, and the valuation should reflect that.
Nurseries sit in a wider mix of buildings than most property types. Things worth thinking about for each:
- Converted houses: several small rooms, upper floors reached by stairs, narrow corridors and areas that can't be used for children. Check the measured area excludes what net internal area leaves out (toilets, stairwells, internal structural walls) and that the layout is reflected. If you or a manager lives in part of the building, check the valuation only covers the nursery parts.
- Purpose-built nurseries: usually more efficient layouts, so a higher price per m² may be justified. The things to check are more likely to be the recorded area, extensions and extras such as air conditioning or solar panels.
- Former offices, shops or industrial units: check the description and scheme are nursery ones, and that the area reflects the space as you use it now.
Location also matters. The VOA's 2026 practice note expects nurseries in prime locations, such as in or on the way into city centres or near big employers like hospitals, and able to charge fees above state-funded rates, to command the highest rents, with those in lower-income residential areas at the lower end. If your nursery has been valued alongside nurseries in very different locations, that is worth looking at.
Are outdoor play areas and parking included in a nursery's business rates?
The VOA records outside play areas, landscaping, car parking and the type of surface, plus fencing, gates and barriers, when it surveys a nursery. Exactly how they feed into the value depends on the local valuation scheme, so check that what's recorded matches what you actually have.
Outdoor space is a bigger part of a nursery than of most businesses, and it's one of the things the VOA's survey instructions name specifically. Look at your summary valuation for:
- Play areas shown as larger than they are, or still shown after part has been built on or given up.
- Parking: the number of staff and visitor spaces, and whether drop-off space shared with neighbours has been counted as yours.
- Security and services: CCTV, gates, barriers and perimeter fencing, heating, air conditioning and solar panels that you don't have, or that only cover part of the building.
Get a site plan, your lease plan and some dated photos together before you raise a check. They're the evidence the VOA asks for.
Do nurseries in church halls, schools or community buildings pay business rates?
It depends on how the nursery occupies the space. A church hall used for the church's own purposes is exempt, but a nursery with rooms of its own may be assessed separately. Nursery classes that are part of a primary or all-age school are valued with the school, not as a separate nursery.
Many pre-schools and nurseries don't have a building of their own. The rules for each set-up are different:
Church and chapel halls
A church hall, chapel hall or similar building used in connection with a place of public religious worship, for the purposes of the organisation that runs the worship there, is exempt from business rates. Whether that still covers a nursery's use depends on the facts, such as whether the nursery has rooms only it uses, or sets up and packs away in a hall the church still controls and uses for other things. If your nursery has been given a separate assessment, or the hall has, it's worth understanding why.
Village halls and community buildings
A public hall hired out to lots of groups may be a separate rateable property from a nursery that has a room to itself. In England, public halls and village halls can qualify for the lower retail, hospitality and leisure multipliers, but a nursery can't, so it matters which property your space is in.
Schools
The VOA's nursery guidance doesn't cover schools of compulsory age that include nursery classes. Those nursery parts are valued with the school. A separate private nursery renting space on a school site may be assessed on its own. Local authority nursery schools that are separately assessed are valued as if empty and to let; if a private operator would bid for them, they're valued by comparison with private nurseries, and only rarely on the contractor's basis (building cost) used for schools.
Do nurseries get the lower retail, hospitality and leisure multiplier?
No. Government guidance on the English retail, hospitality and leisure multipliers lists schools, creches and nurseries as not qualifying, because they aren't open to visiting members of the public. So in 2026/27 a nursery in England pays 43.2p if its rateable value is under £51,000 or 48p from £51,000 to £499,999.
From April 2026 England has lower multipliers for qualifying retail, hospitality and leisure (RHL) property. The guidance explains that people using childcare providers aren't "visiting members of the public", because those premises are closed to the public, and it names nurseries and creches among the properties that don't qualify.
| Nursery's rateable value (England, 2026/27) | Multiplier | With 1p supplement |
|---|---|---|
| Under £51,000 | 43.2p | 44.2p |
| £51,000 to £499,999 | 48p | 49p |
| £500,000 or more | 50.8p | 51.8p |
The 1p transitional relief supplement applies in 2026/27 to most properties that were in the rating list on 31 March 2026, unless they get transitional relief, supporting small business relief or rural rate relief. New properties don't pay it. It's added before reliefs. How business rates are calculated explains it in full.
In Wales, nurseries pay the standard multiplier of 0.502, or the higher multiplier of 0.515 where the RV is above £100,000 (some public-service descriptions are excepted). The lower 0.350 retail multiplier is for shops, kiosks, pharmacies and post offices, not nurseries.
What business rates relief can a nursery get?
In England there is no nursery-specific relief at present, so the main ones are small business rate relief for a single property with an RV under £15,000 and, for nurseries run by a registered charity, up to 80% charitable relief. In Wales, registered childcare providers get 100% relief through small business rates relief.
England
- Small business rate relief (SBRR): no rates to pay if your nursery's RV is £12,000 or less and it's usually your only property; tapered relief from £12,001 to £15,000. If you open a second nursery, you may keep relief on the first for a grace period (36 months if the second property was taken on from 27 November 2025).
- Charitable rate relief: a nursery or pre-school run by a registered charity and used mainly for charitable purposes can get up to 80% off, and the council may top this up with discretionary relief. You can't get SBRR and charitable relief together; the council decides which applies. The 2025 removal of charitable relief from private schools in England does not apply to nursery schools, which are excluded from that definition.
- Transitional relief and supporting small business relief: may limit a rise in your bill after the 2026 revaluation. Both are applied by the council.
- Hardship relief: at the council's discretion.
England did give nurseries a childcare discount during the pandemic, for 2020/21 and 2021/22 only. It has ended.
Wales
Business Wales says the Welsh Government provides 100% relief to all registered childcare providers in Wales through small business rates relief, to support the childcare offer and because nursery regulations often mean their rateable values are proportionately larger than other small businesses. Registered childcare premises aren't affected by the usual limit of two properties per business in each council area. Councils apply SBRR; if your bill doesn't show it, ask your council. Charity-run nurseries in Wales can instead get 80% mandatory charitable relief, with up to 100% at the council's discretion.
How much are business rates for a nursery? Worked examples
Multiply the rateable value by the multiplier, adding 1p in England if the supplement applies, then take off reliefs. A nursery in England with an RV of £22,000 paying the supplement would be £22,000 × 0.442 = £9,724 for 2026/27 before reliefs. In Wales a registered childcare provider would usually have 100% relief.
These are illustrative examples. The prices per m² are made up for the example, not real rates for any area.
| Step | Converted house nursery | Purpose-built nursery |
|---|---|---|
| Net internal area | 220 m² | 450 m² |
| Price per m² (example) | £100 | £120 |
| Rateable value | £22,000 | £54,000 |
| England multiplier + 1p supplement | 43.2p + 1p = 44.2p | 48p + 1p = 49p |
| England bill before reliefs | £22,000 × 0.442 = £9,724 | £54,000 × 0.49 = £26,460 |
| If no supplement (e.g. getting transitional relief) | £22,000 × 0.432 = £9,504, then the transitional relief cap | £54,000 × 0.48 = £25,920, then the transitional relief cap |
Charity-run nursery (England): if the £22,000 nursery is run by a registered charity, 80% charitable relief comes off the figure including the supplement: £9,724 × 20% = £1,944.80 to pay, before any discretionary top-up.
Small nursery (England): a pre-school with an RV of £13,500 that is the operator's only property gets 50% SBRR: £13,500 × 0.442 = £5,967, less 50% = £2,983.50.
Wales: the £22,000 nursery would be £22,000 × 0.502 = £11,044 before relief. As a registered childcare provider it would normally get 100% small business rates relief, leaving nothing to pay.
2027/28 (England): at the Budget on 28 October 2026 the government announced multipliers due from 1 April 2027 of 44.7p (RV under £51,000) and 49.7p (£51,000 to £499,999), with the 1p supplement continuing, subject to regulations. Nurseries still wouldn't get the RHL multipliers.
To try your own figures, use the business rates calculator.
What should a nursery check on its rateable value?
Check the floor area against your plans, the rooms and outdoor areas recorded, the description, whether the assessment covers only the space your nursery occupies, and the extras listed such as air conditioning, CCTV and parking. Then compare your price per m² with similar nurseries nearby.
Open your summary valuation on GOV.UK ("Find a business rates valuation" or your valuation account) and work through it:
- Floor area: does it match a measured plan? Net internal area leaves out toilets, stairwells, lift shafts, internal structural walls and shared entrance halls.
- Space that isn't yours: rooms used by a church, school or another group, or a flat someone lives in.
- Extensions and changes: a new baby room or garden room should be included once built, but rooms you've given up or demolished should be removed.
- Outdoor areas and parking: sizes and numbers as they are on the ground.
- Services: air conditioning, heating, CCTV, gates and solar panels, and whether they cover the whole building or part.
- Comparables: other nurseries in the same scheme, adjusted for location, size, age and layout.
For what the figures in a valuation mean, see what is rateable value? and the 2026 revaluation.
When might it be worth challenging a nursery's rateable value?
It may be worth a check if the floor area, outdoor space or description looks wrong, if the assessment includes space you don't occupy, if similar nurseries nearby are valued at a lower price per m², or if something outside the property, such as major works next door, is affecting it.
Reasons nursery operators may look again at their valuation include:
- Measurement and layout: a converted building measured as if every square metre were usable, or areas net internal area should exclude.
- Wrong unit of assessment: a nursery in a hall, school or community centre assessed together with space it doesn't occupy, or split when it should be one.
- Location and comparables: your nursery valued in line with nurseries in stronger locations.
- Change of method: a big jump from the 2023 list, where the move from per-place to per-m² analysis may not suit your building. A rise alone isn't a ground for challenge, but it is a reason to check the figures used.
- Material change of circumstances: things outside the property, such as long-term disruptive roadworks or the reconstruction of a neighbouring building. Report a temporary issue while it is still happening.
The process is Check, Challenge, Appeal. You raise a check in your business rates valuation account first, which is free, then you can challenge within 4 months of the check decision with your reasons, evidence, a proposed rateable value and rent details. Appeals go to the Valuation Tribunal for England or the Valuation Tribunal for Wales. The value can go up, down or stay the same.
In Wales, if 100% childcare relief already means you pay nothing, a challenge is unlikely to change your bill now, though the rateable value would matter if your circumstances changed.
You can do all this yourself. Some operators use a rating surveyor because they know local nursery rents, comparable valuations, the evidence the VOA expects and the deadlines. Fees are agreed directly with the surveyor.
Related guides
Business rates for nurseries: frequently asked questions
Do day nurseries pay business rates?
Yes, unless an exemption or relief applies. A day nursery is non-domestic property, so it has a rateable value set by the VOA and the council sends a bill based on it. Small nurseries may get small business rate relief, charity-run nurseries may get charitable relief, and in Wales registered childcare providers get 100% relief.
How is a nursery's rateable value worked out?
The VOA usually compares rents. For the 2026 list it analyses nursery rents into a price per square metre of net internal area and multiplies that by your floor area, taking account of the building's design, how it's used and its location.
Is my nursery valued on the number of children?
Not directly for the 2026 list. The VOA analysed rents per registered child place for the 2023 list, but its 2026 practice note says nurseries are now valued in pounds per square metre. It still records your registered places and considers the accommodation against early years space standards.
Do nurseries get the retail, hospitality and leisure multiplier in England?
No. Government guidance lists schools, creches and nurseries as not qualifying because they aren't open to visiting members of the public. Nurseries pay 43.2p if the rateable value is under £51,000 or 48p from £51,000 to £499,999 in 2026/27, plus the 1p supplement for many.
Is there business rates relief for nurseries in England?
There is no nursery-specific relief in England at present; the pandemic-era nursery discount ended after 2021/22. The main reliefs are small business rate relief for a single property with a rateable value under £15,000, and up to 80% charitable relief for nurseries run by a registered charity.
What childcare relief is there in Wales?
Business Wales says the Welsh Government provides 100% relief to all registered childcare providers through small business rates relief, and the usual two-properties-per-council limit doesn't apply to them. Councils apply it, so contact yours if your bill doesn't show it.
Do I pay business rates if my nursery is in a church hall?
It depends on how the space is used. A church hall used in connection with a place of public religious worship for the church's own purposes is exempt. A nursery with rooms of its own may be assessed separately, so it's worth checking how your space has been treated.
Are nursery classes in a primary school assessed separately?
No. The VOA's nursery guidance doesn't apply to compulsory-age schools with nursery elements; those nursery parts are valued with the school. A separate private nursery renting space on a school site may have its own assessment.
Are outdoor play areas included in a nursery's rateable value?
The VOA records outside play areas, landscaping, parking, fencing and gates when it surveys a nursery. How they affect the value depends on the local valuation scheme, so check the areas recorded match what you have.
Can a charity-run nursery get charitable rate relief?
It may, if it is run by a registered charity and used mainly for charitable purposes: up to 80% off, with possible discretionary top-up from the council. You can't get small business rate relief and charitable relief together. The removal of charitable relief from private schools in England doesn't cover nursery schools.
Can I challenge my nursery's rateable value myself?
Yes. You can raise a check and then a challenge free through your business rates valuation account on GOV.UK, within the time limits. A rating surveyor can do it for you if you prefer, with fees agreed directly with them.
Sources
We checked the facts on this page against these official sources on 12 November 2026:
- How day nurseries are valued for business rates (GOV.UK)
- Rating Manual: day nurseries, nursery schools and other day care facilities for under fives (GOV.UK)
- Business Rates Multipliers: Qualifying Retail, Hospitality or Leisure (GOV.UK)
- Business rates relief (GOV.UK)
- Non-domestic rates: small business rates relief (Business Wales)
- Challenge the valuation (GOV.UK)