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Do I need to pay VAT on my commercial property acquisition?
27th June 2017

The general rule is that for “new” commercial premises in essence commercial premises, built within the last 3 years, then yes you do need to pay Value Added Tax on the purchase price.

For commercial premises in excess of 3 years old, the seller, normally has to make an option to tax the property, they will normally do this if they need to re-coup the Value Added Tax on their purchases.

If you are buying a property which is subject to leases and in general terms (although there are a lot more rules to satisfy) the seller has made an option to tax the property, and you have made an option to tax, then the purchase may qualify as a “Transfer of a going concern” which in essence means you will not pay VAT.

The liability to pay, VAT on commercial premises is an extremely complex area, and in that regard, we would strongly advise you to speak to your accountant.

PLS Solicitors specialise in advising on the complex area of commercial property, especially Commercial Conveyancing. We offer a friendly, efficient and effective legal advice on any area of commercial property.

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