New Industrial Property Purchase – Stamp Duty?

New Industrial Property Purchase – Stamp Duty?

15:48 PM, 4th May 2020, About 4 years ago 4

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This month I am purchasing an Industrial new Build price £200,000 + VAT. The Developer has a larger unit that I want to purchase at £340,00 + VAT within six months and has agreed to take the original purchased Unit back at full purchase price in p/x.

The original unit was intended for my manufacturing company use, but on reflection it is not large enough so my intention is to moth ball the original purchase till the larger unit is available.

My question is can I and if so avoid a double Stamp Duty charge. I expect to pay it on the larger unit, but it seems harsh if I have to pay it on the smaller unit never occupied. Is there some contra scheme by HMRC that can be used?

I realise the simple option is to drop the purchase of the smaller unit and purchase the larger one, but I am so far down the road to drop out now would risk the loss of a considerable deposit and I could end up with neither unit, also I understand times are difficult and the developer will want to get his hands on cash from a sale. I do not want to purchase both Units.


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Chris Bunn

9:47 AM, 5th May 2020, About 4 years ago

Good morning Tony.
I would approach the developer if you are not going to use the unit. Ask if you can make the payment you were going to pay for the smaller unit as a deposit on the larger unit. If he accepts and I do not see why not especially If you are able to pull out of the deal. He will have the money and can still market the small unit as you will not have taken ownership. If you take ownership there will be a cost to selling it if not required.

Ian Narbeth

9:51 AM, 5th May 2020, About 4 years ago

SDLT on a non-residential property purchased for £240,000 (£200,00 + VAT) is £1800. Why are you concerned? It would be crazy to lose your deposit over £1800. It might be possible to reach some deal with the developer but you will need professional advice (you have a solicitor acting on the purchase?) and to do the job properly it will cost as much as the SDLT to document a deal with the developer.


10:59 AM, 5th May 2020, About 4 years ago

Yep your right for £1,800 its a no brainer. Thanks.

Penny DJ

11:19 AM, 5th May 2020, About 4 years ago

I like the first suggestion to use your payment as deposit on the larger unit. This will allow the developer to re sell the smaller one sooner and get double the income before finishing the second unit.

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