Buying commercial property can be an important part of developing your business.
It can provide a stable location, build equity, and reflect positively on your business.
However, it’s also a decision fraught with complexities and potential pitfalls.
Understanding your business needs
Start with a clear understanding of what you need the property for.
Think about size, location, type of property (office, retail, industrial), and accessibility. Don’t forget to consider your future needs as your business grows.
The location should be convenient for your employees, clients, and suppliers. Also, consider the location’s reputation, potential for growth, and local amenities.
Stamp Duty Land Tax
Be clear about how much you can afford, including the deposit, mortgage repayments, insurance, taxes, and maintenance costs.
If you buy a commercial property worth £150,000 or more, you will have to pay Stamp Duty Land Tax (Stamp Duty).
From £150,000-£250,000, you will be levied two per cent in duty and for a property above £250,000, you will be charged a further five per cent on the remainder of its value.
Understanding planning permissions, restrictions, and local regulations is crucial.
You will need to consider title deeds and restrictions. Our solicitors can review the deeds for any restrictions which could limit your use of the property.
You should also consider environmental regulations which could lead to penalties.
Other things you will need to consider include building regulations, safety laws and whether the property is freehold or leasehold.
If the property is freehold, you own the property and the land it sits on. An advantage of this is the security which comes with complete ownership, but this can mean a higher cost.
If the property is leasehold, you own the property for a fixed amount of time, but you do not own the land it sits on.
An advantage of this is that you have greater flexibility to move premises at the end of a lease to bigger premises without finding a buyer or may be able to transfer the existing lease to another tenant during the term. In addition, you do not need to tie up capital to pay for the property.
Disadvantages include that you may be limited in what you can do to the property and require your landlord’s consent for various matters relating to it.
In terms of health and safety, you’ll be responsible for:
We recommend seeking guidance to ensure a smooth process and to avoid any mistakes.
Our expertise can guide you through the complexities of the commercial property market.
If you need advice on buying commercial property for your business, contact us today.