Commercial Property Costs
In
addition to the purchase price of a commercial property it is important
for purchasers or tenants to understand the other costs involved
in the transaction.
The
rates of stamp duty applicable to commercial property are different
than those applied to residential property and the current rates
are as set out below:
| Up
to €10,000 |
Exempt |
| 10,001
- 20,000 |
1% |
| 20,001
- 30,000 |
2% |
| 30,001
- 40,000 |
3% |
| 40,001
- 70,000 |
4% |
| 70,001
- 80,000 |
5% |
| €80,001
- 100,000 |
6% |
| €100,001
- 120,000 |
7% |
| €120,001
- 150,000 |
8% |
| Over
150,000 |
9% |
It
should be noted that in leasing property stamp duty also arises.
If the lease does not exceed 35 years or is indefinite stamp duty
charges are at a rate of 1% of the average annual rent. If there
is a rent review clause in the lease an additional fixed duty of
12.50 is payable
If a "premium" otherwise know as "key money" is paid for a lease,
this is also liable to stamp duty.
Your Solicitor is best to advise in relation to actual stamp duty
payable.
These
can vary between Solicitor firms; get a quotation before proceeding.
The scale fee quoted by Solicitors is 1% of the purchase price plus
VAT (21%) plus 125.
In
commercial transactions the Solicitor normally has to deal with
a commercial loan as well as his/her main task of registering the
property with the Registry of Deeds or the land Registry depending
on the title of the property being purchased. The Land Registry
and the Registry of Deeds are Government bodies and the fees applicable
for registration fee are as set out below.
Land
Registry Summary of Fees
Registry
of Deeds Summary of Fees
The Solicitor will determine the nature of the title to your property.
The costs incurred will depend on whether a title is held in the
Land Registry or the Register of Deeds.
| VAT
on Commercial Property |
When
purchasing property one should always consider the VAT implications.
Many commercial properties are not liable at all to VAT but then
others are. Therefore it is important that before purchasing a commercial
property one establishes the possibility of a potential VAT liability.
One should also consult their Accountant in such matters.
Banks
charge a commitment fee of up to 1% of the amount of the loan approved.
However this is often negotiable and can in many instances be waived.
Additionally you may have to pay the legal fees of the bank in having
their mortgage on the property given as security for a loan completed.
In buying commercial property one should always investigate these
costs at an early stage.
In
virtually all cases where lenders are providing money for commercial
property an independent valuation of the property will arise. Fees
for such valuations are usually to the order of 500 but may be
much higher for higher valued properties.
The
structural survey should not be mixed up with valuation report.
The structural survey is a detailed and comprehensive report which
is independently sought by a purchaser in relation to a proposed
property. It is designed to evaluate the condition of the property
for the purchaser. The price of this can vary depending on the extent
of the property, the location of the property, the firm selected
to do the work and other variables that normally arise on such transactions.
It is not possible to give an estimate of what these costs might
be because there are so many variables.
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