Costs Involved in Buying a Commercial Property

Commercial Property Buying Guide There are more costs associated with buying a commercial property in addition to the sale price. Learn more about all the other costs relating to a commercial property purchase with our guide.

Learn More About the Costs Involved in Buying a Commercial Property

When you purchase a commercial property, there are several costs that need to be taken into account:

Fees for Any Professional Advisers (Surveyors, Solicitors Etc) & Commercial Mortgages

An acquisition surveyor will charge a fee of between 0.5 % to 3 % of the total cost of purchase. There is likely to be a degree of a negotiation on this fee, depending upon the complexity and skills required to complete the acquisition.

Solicitor’s fees are generally between 0.5% to 1.25% of the value of the transaction. This can also be negotiated, depending upon the circumstances of the acquisition.

You may need a commercial mortgage to finance your property purchase. The terms could vary greatly from 1 to 15 years or more (Please refer to ‘Commercial Mortgages’ Section for detailed information).

Business Rates

Business rates are based on the rateable value. These valuations are carried out by The Valuation Office Agency (VOA). These are revised on a periodic basis. The last valuation in England and Wales was carried out in April 2010 (Please refer to ‘Business Rates’ Section for detailed information). Scotland has its own system called Non-Domestic Rates, which is carried out by the Scottish Assessors (Valuation Department) and the poundage is set by Scottish Ministers. The last revision was carried out in April 2010.

Other Costs Involved

  • Local authority charges for services (i.e. parking and waste collection etc).
  • Insurance
  • Repairs and maintenance
  • Running costs or Service charge (lighting, heating, any cleaning services etc). You should ask to see an Energy Performance Certificate (EPC) for the commercial property and ensure that a copy is made available. It is a legal requirement for the seller to provide this prior to the property being marketed. (Please refer to ‘Commercial EPC’ Section for detailed information).
  • Stamp Duty Land Tax (SDLT) – payable on the majority of commercial properties (Please refer to ‘SDLT’ Section for detailed information).
  • Deposit – this is in general equivalent to around 20% – 30% of the commercial property value.
  • VAT (if you’re registered for VAT, you may be able to claim it back) some buildings have been elected for VAT which means you will pay VAT on all building costs and service charges. An identical building next door may not have been elected for VAT and therefore VAT will not be charged on the service charge.

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