Buying business property

When you conclude a commercial property purchase, you move through exchanging contracts, paying any deposit, completing the sale, and dealing with tax and registration requirements.

Exchanging contracts when buying property

You are normally ready to exchange contracts when:

• buyer and seller agree the price and are satisfied with the contract terms
• your surveyor and solicitor have completed all necessary checks and land searches
• any required planning permissions for proposed alterations have been granted
• you have secured the finance needed to buy the property

At exchange, the solicitors for both sides swap signed contracts. Once contracts are exchanged, the agreement to buy becomes legally binding.

Paying the deposit

If you are paying a deposit (part of the purchase price upfront), this is normally paid on exchange of contracts. Your solicitor receives the agreed deposit from you and transfers it to the seller’s solicitor. The deposit is typically non-refundable if you later withdraw without a valid contractual reason.

Completing the sale

After exchange, you agree a completion date with the seller.

• Before completion, arrange appropriate commercial property insurance so cover is in place from the day you take ownership.
• On the completion date, your solicitor transfers the balance of the purchase price (usually using funds from your mortgage lender or other finance) to the seller’s solicitor.
• Once the funds are received, you become the legal owner and your mortgage repayments start under the agreed terms.

See commercial mortgages and lenders.

Stamp Duty Land Tax for commercial property sales

When you buy commercial property in the UK, you may have to pay Stamp Duty Land Tax (SDLT).

• SDLT is charged above a set price threshold for non-residential and mixed-use properties.
• Even if the price is below the main SDLT threshold, you will usually still need to submit an SDLT return.
• You must file the SDLT return and pay any tax due to HM Revenue & Customs within 14 days of completion.
• The amount you pay depends on the purchase price, using current SDLT bands and rates.

For further guidance, see SDLT rates for non-residential and mixed land and property.

Land Registry and title

After completion, the property title must be registered.

• For properties in Northern Ireland, your solicitor will apply to register the change of ownership with the Land Registry and pay the applicable registration fee.
• Once registration is completed, your solicitor receives the title documents or electronic title confirmation that proves ownership.
• If you have a mortgage, the lender will usually hold the title deeds or be registered as having a legal charge over the property until the loan is repaid.

Read further information about Land Registry.