📅 Updated October 2026 • ⏱️ 5 minute read

Buying Commercial Property: What Costs Should You Budget For?

Buying commercial property can be an exciting step for a business.

Whether you’re purchasing your own premises, expanding into a larger site or buying a property as an investment, it’s easy to focus on two figures:

The purchase price and the deposit.

But they’re rarely the only costs involved.

Understanding the wider costs at the beginning can help you plan your cash contribution properly, avoid unwelcome surprises and make sure you retain enough working capital for the business once the purchase completes.

So, what should you be budgeting for?

1. Your deposit

If you’re using a commercial mortgage to fund the purchase, you’ll normally need to contribute some of the purchase price yourself.

There isn’t one standard deposit requirement across commercial mortgages. The amount required can depend on several factors, including:

• The type of property
• Whether it will be owner-occupied or let to a third party
• The strength and trading history of the business
• Affordability
• The property’s value and condition
• The lender and its individual criteria

Rather than assuming a particular loan-to-value will be available, it’s worth exploring the funding position early in the process.

2. Property valuation

A commercial mortgage lender will generally require a valuation of the property before agreeing to lend.

This is usually carried out by a suitably qualified commercial valuer and helps the lender establish the property’s value and suitability as security.

Commercial valuation fees can vary depending on the size, type, location and complexity of the property.

It’s therefore worth allowing for this cost separately rather than assuming it will be included within the mortgage.

3. Legal fees

Commercial property transactions can involve more legal work than a straightforward residential purchase.

Your solicitor may need to consider matters such as:

• Title and ownership
• Searches
• Existing or proposed leases
• Rights of access
• Planning and permitted use
• Environmental matters
• Restrictions affecting the property
• The lender’s legal requirements

You’ll need to budget for your own solicitor’s costs and, depending on the lender and transaction, you may also be responsible for some or all of the lender’s legal costs.

4. Surveys and specialist reports

A lender’s valuation is primarily for the lender’s benefit. It isn’t necessarily a detailed assessment of the condition of the property.

Depending on what you’re buying, you may want additional surveys or specialist reports.

These could include a building survey, structural assessment, environmental report or other specialist investigations.

Spending money understanding the property before committing to the purchase can be considerably less expensive than discovering a major problem afterwards.

5. Stamp Duty Land Tax

Purchasing commercial property in England may result in Stamp Duty Land Tax (SDLT) becoming payable.

The amount will depend on the transaction and circumstances, so this needs to be factored into the overall cash requirement.

Your solicitor or tax adviser can confirm the SDLT position for the particular purchase.

6. VAT

VAT can sometimes be one of the more significant considerations when purchasing commercial property.

Some commercial properties may be subject to VAT, including where the seller has opted to tax the property.

Whether VAT applies, whether it can be reclaimed and how it should be treated within the transaction will depend on the circumstances.

It’s important to establish the VAT position early and obtain appropriate tax advice rather than discovering an additional cash requirement late in the purchase.

7. Lender fees

Commercial mortgage products can come with a range of fees.

Depending on the lender and product, these could include:

• Arrangement fees
• Application fees
• Valuation fees
• Legal costs
• Other administration or completion charges

An attractive headline interest rate doesn’t necessarily mean a particular product will have the lowest overall cost.

When comparing commercial finance options, it’s important to look at the whole package, not simply the rate.

8. Broker fees

If you’re using a commercial finance broker, there may also be a broker fee for arranging the finance.

This should be clearly explained before you proceed so it can be included within your overall purchase budget.

9. Refurbishment and fit-out

Getting the keys doesn’t necessarily mean the property is ready for your business to move straight in.

You may need to budget for things such as:

• Refurbishment or repairs
• Office or shop fit-out
• Machinery installation
• IT and communications
• Furniture
• Signage
• Security systems
• Changes required for your particular business use

For some purchases, these costs can represent a significant part of the overall project.

10. Moving and ongoing property costs

There are also practical costs associated with occupying commercial premises.

Depending on the property, these might include:

• Business rates
• Buildings insurance
• Utilities
• Service charges
• Maintenance
• Moving costs
• Professional fees
• Initial stock or equipment requirements

These costs may not form part of the purchase itself, but they can affect the amount of cash the business needs after completion.

Don’t forget your working capital

This is perhaps the easiest one to overlook.

If you’ve saved a substantial amount towards purchasing business premises, it can be tempting to put as much of that cash as possible into the property.

But the business still needs money after the keys are handed over.

Using every available pound for the deposit and purchase costs could leave very little flexibility for wages, suppliers, stock, tax, unexpected expenses or future opportunities.

That’s why commercial property finance shouldn’t be considered in isolation.

The question isn’t simply:

“How much can we borrow?”

It’s also:

“How should we structure the purchase while keeping the business financially comfortable afterwards?”

Planning the finance early

Speaking to a commercial finance broker before you’ve committed to a purchase can help you understand the potential borrowing available and the likely information a lender will require.

It can also help you build a more realistic picture of the total cash requirement, rather than concentrating solely on the deposit.

At Liberty Verado Commercial, we start by understanding the property, the business and what you’re trying to achieve before exploring the commercial mortgage options that may be available.

Whether you’ve already found a property or you’re only beginning to consider buying your own premises, an initial conversation can help you understand what the funding might look like.

Frequently Asked Questions

Not Sure Which Funding Option Is Right?

Choosing between a commercial mortgage and bridging finance isn’t simply about interest rates—it’s about selecting the funding that best fits your project, timescales and long-term objectives.

Every transaction is different, which is why an early conversation can often save time, reduce costs and help avoid unnecessary complications later.

If you’re exploring your options, we’d be delighted to discuss your project with no obligation.

📞 Speak to us

✓ No obligation

✓ Clear, straightforward guidance

✓ Access to specialist commercial lenders