Purchasing a commercial property is a major investment, whether you’re expanding your portfolio or taking your first step into the market. As a commercial property buyer, not properly researching and planning the purchase could result in money being lost in unexpected taxes. With complex rules and tight deadlines, it’s crucial to be prepared. 

Let’s walk through the top 5 tax mistakes commercial property buyers make, and how you can avoid them.

1. Overlooking Capital Allowances

One of the biggest (and most expensive) mistakes a commercial property buyer can make is ignoring capital allowances. Many buyers don’t realise you can claim significant tax relief on qualifying fixtures and fittings within the property, such as lighting systems, air conditioning, or security equipment. 

This is a tax saving that you may not have heard of before, as accountants rarely have the expertise to deliver on this area. That’s because whilst most have studied and practice general accounting principles, capital allowances are a specific tax saving, found under tax laws: Capital Allowances. We work in tandem with your accountant to educate them and file the correct tax return, with the required specialised surveyors report that we undertake and provide. 

How to avoid it: Before completing the purchase, work with a specialist surveyor who can identify all eligible items. A professional capital allowances review can unlock thousands in tax savings that would otherwise be missed.

2. Misunderstanding Stamp Duty Land Tax (SDLT)

Stamp Duty Land Tax is often misunderstood, especially by first-time commercial property buyers. Unlike residential property, commercial properties have a different SDLT rate and can sometimes offer opportunities for savings, particularly with mixed use properties or where portions of the property are uninhabitable.

How to avoid it: Always check the latest SDLT bands for commercial properties and consider seeking advice if the property has unusual features. A tax advisor can help you correctly classify the property and potentially reduce your SDLT bill.

3. Failing to Structure the Purchase Tax-Efficiently

Purchasing a property in your own name, versus through a limited company, can have huge tax implications. Many commercial property buyers fail to consider ownership structures until it’s too late, resulting in higher income tax or limited access to tax planning opportunities.

How to avoid it: Speak to a tax advisor early in the buying process. They can help you assess whether personal ownership, partnership, or corporate structures would deliver better long-term tax outcomes based on your investment goals.

4. Forgetting About VAT

VAT can be a minefield for the commercial property buyer. Some commercial properties are opted to tax, meaning VAT is charged on the sale price. If you’re not registered for VAT, you might suddenly find yourself with a 20% extra bill you hadn’t budgeted for.

How to avoid it: Always ask early if the property is VAT elected. If it is, ensure you structure the deal as a “Transfer of a Going Concern” (TOGC) where possible, which can be VAT-free. Getting clear advice on VAT treatment can save you a serious financial headache.

5. Ignoring Future Tax Implications

It’s easy to focus on getting the deal over the line, but what happens after you buy? Commercial property buyers often overlook future taxes such as Annual Tax on Enveloped Dwellings (ATED), Business Rates, or even Capital Gains Tax (CGT) liabilities when selling later.

How to avoid it: Build a full tax roadmap with your advisor. Understand what ongoing costs and future taxes you may face so you can plan cashflow, hold periods, and exit strategies more intelligently.

Get in touch: Plan Early, Save More

If you’re a commercial property buyer, the secret to maximising your investment is planning your tax strategy before you sign on the dotted line. Each of these common mistakes is avoidable with the right advice and a proactive approach.

At CPA Tax, we specialise in helping commercial property buyers navigate complex tax rules and secure every available saving.

Whether you’re making your first investment or expanding a growing portfolio, we can guide you through capital allowances, SDLT, VAT, and beyond.

Book a free consultation with our team today. 

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