Whether you are an experienced property investor or just starting out, we recognise that investing in property is a significant outlay. Aside from the physical building there are number of matters which can affect the value of a property investment. Typically commercial property is purchased with tenants already in place so it is important to look closely at the terms of the lease or leases to ensure there is nothing adverse which would detract from the investment.
Unlike residential property, commercial property may be subject to VAT. It is important to look at the tax treatment on a sale or purchase to ensure it is dealt with fully. Things to consider may include:
- If the property is elected for VAT it may be possible to claim relief under the Transfer of Going Concern rules.
- Are there any capital allowances available regarding plant and machinery?
- Do the leases contain any break options on the part of the tenants and if so on what terms?
- Are the leases on fully repairing or insuring terms? If not there could be a shortfall in the rental income?
- Are there any rent deposits, bonds or guarantees which you may want to transfer to you on completion of the purchase?
- Do the leases provide for a review of the rent and if so on what terms? Are the rent reviews upwards only?
- Do the tenants have security of tenure and a right to renew the lease when it expires?
We have expertise in dealing with both sales and purchases of commercial property, advising regarding VAT and if necessary dealing with the option to tax, reviewing and advising on the terms of the leases, dealing with the tax return for Stamp Duty Land Tax and investigating the title to the property to ensure that a marketable investment is obtained.
We are happy to provide an initial no obligation discussion and therefore should you require any more information please contact us.