A beginner’s guide to costs when buying commercial property
Although many companies choose to rent a commercial property there are advantages to purchasing premises. You will need more money to begin with in the form of a deposit which will be approx. 20-30% of the property value but buying gives you control of the property, your mortgage repayments could be lower than rent rates each month although they are often over a shorter term (usually between 1 to 15 years), you are not tied to a contract and you could make money if you decide to sell the building.
Here’s a handy (though not exhaustive) list of other fees you may need to budget for:
- SDLT (Stamp Land Duty Tax). The current threshold in England and Northern Ireland for commercial property or mixed-use land is £150,000 or more. (In Scotland Stamp Duty has been replaced with the Land and Buildings Transaction Tax and in Wales by the Land Transaction Tax) https://www.gov.uk/stamp-duty-land-tax/nonresidential-and-mixed-use-rates
- Fees for solicitors and surveyors
- Construction, decorating and repair costs. Do you need to make improvements for such things as disabled access?
- Maintenance costs. These will increase as the building ages.
- Business buildings insurance
- Business rates. These are based on the rateable value of the property as identified by the government. https://www.gov.uk/correct-your-business-rates
- Waste management. All businesses in the UK have to pay for any waste created within the business to be removed.
- The cost of this cost will be determined by the size of the property.
- Cleaning price will be dependent on Location, the scope and frequency of services and the size of the building.
- Utilities-including lighting, heating, air conditioning
- VAT considerations.
It’s free to search the NovaLoca website for your commercial property requirements and you can set up alerts to receive updates of new and updated properties by email.