Generally, a deposit is required when contracts are exchanged to buy a commercial industrial property. The remainder is then paid when the deal completes.
However, there are several other costs to take into account when it comes to buying commercial property. These can include:
- Professional Advice: Legal fees, Agent fees and fees associated with arranging a commercial mortgage
- GST: the sale and rental are subject to GST if the owner is GST-registered
- Property Tax: property tax equivalent to 10 percent of the property’s annual value is levied for commercial and industrial property
- Maintenance Fee: while property purchases can be excellent investments, purchasers should know how much they would have to pay in taxes and for the upkeep of the property
- Decorating and refurbishingthe commercial property
- Other Cost:buying and fitting out the space with furniture and equipment; hiring a firm to help transport furniture and equipment; setting up facilities, including establishing IT, etc.
And the bills don’t end there. You should consider the ongoing costs of maintaining commercial property too. If you plan to let out the commercial property, you will likely want to share some of these bills with your tenant.
The costs of owning a commercial property might include:
- Insurance
- Repairs and maintenance
- Services, including security and cleaning
- Local authority charges, including waste collection
- Retaining a commercial property estate agent to manage the building
- Commercial mortgage repayments, if applicable