Experienced Commercial Property Partner Sarah Heath recently joined Frettens Solicitors, in a ‘major coup’ for the firm.

In her first Q&A with Dorset Biz News, Sarah answers your questions on Stamp Duty in Commercial Property; outlining how it works, the rates and exemptions.

How does stamp duty work on commercial property?

In England and Northern Ireland, you pay no stamp duty on the first £150,000 on a commercial property transaction.

Beyond that, you pay 2% on the next £100,000 and 5% on properties over £250,000.

For example, a £350,000 commercial property falls within the 3^rd category, as it costs more than £250,000, and you would have to pay stamp duty at 5%.

In addition, a 3% surcharge can also be payable if you are a non-UK resident/foreign registered company.

Please be aware that stamp duty rates are often adjusted.

Is stamp duty more for a commercial property?

Whether stamp duty is more expensive for commercial property than it is for residential property depends on the price.

For example, if your commercial property is between £150,001 and £250,000; you pay 2% stamp duty. But stamp duty isn’t applicable up to £250,000 on residential property.

5% stamp duty is payable on properties over £250,000 in both residential and commercial properties. However, residential homes worth between £250,001 and £1.5m attract 10% tax; with 12% payable on homes above £1.5m.

Commercial stamp duty is capped at 5%.

Read more about residential stamp duty rates here.

What commercial properties are exempt from stamp duty?

Other than properties under £150,000, there are a number of other exemptions:

• Commercial Properties acquired by a charity
• Properties bought by social landlords (read more about social housing here)
• Properties acquired through sale and leaseback
• Properties acquired by property investment funds, Crown employees, relocated employees or through a compulsory purchase order

What other fees are there when buying a commercial property?

On top of stamp duty, there are some other fees that apply when buying a commercial property:

• Rent (where applicable)
• Repair and maintenance
  Related: Who is responsible for repairs and maintenance in commercial leases?
• Energy costs
  Related: Everything you need to know about Energy Performance Certificates
• Service charges
• Insurance payments
• Business rates
• Legal fees

At Frettens, we will always be up front with legal fees and there will be no hidden costs. You can contact us for a quote on 01202 499255.

Related: A complete guide to commercial mortgages

You can read the full article on stamp duty in commercial property here.

Specialist Commercial Property Solicitors

Frettens’ bright Commercial Property Team have vast experience in buying, buying to let and renting commercial premises and would be happy to assist you.

Sarah, or a member of the team, can provide tailored advice on your circumstances, including how to reduce your stamp duty, and assist you in all legal aspects of purchase.

You can call us on 01202 499255, or fill out the form at the top of this page, for a free initial appointment.