Dublin Estates Map
Click on a quadrant to activate map
Call us now on
01 4532 755
Useful Information
PURCHASING COMMERCIAL PROPERTY/LAND?
Prices quoted on marketing material by agents are exclusive of vat (if exigible) and stamp duty. Sales of existing buildings and land are subject to stamp duty, currently at the rate of 6% of the sale price for transactions over €80,000. It is worthwhile purchasing off plans in new developments, as in the majority of these, stamp duty savings may be available to early purchasers, depending on their individual tax status. However, it is prudent seek independent tax advice on the availability of same.
In the case where an occupier acquires a site and constructs a facility, stamp duty is payable on the land only. It is important for those proceeding down this route to be aware that aside from land acquisition costs, building costs, planning application and fire cert fees, Architects/Engineers professional fees and funding costs, there are additional costs such as levies payable to the Local Authority which must be discharged prior to construction commencing. Provision for surface water attenuation is now a requirement of the various Local Authorities and should be budgeted for. When purchasing off developers, all costs, including levies are included in the prices quoted, with the exception of vat (if exigible) and stamp duty.
Commercial Property Stamp Duty Rates
|
Aggregate Consideration:
|
Rate of Duty:
|
|
Up to €10,000
|
Exempt
|
|
€10,001 to €20,000
|
1%
|
|
€20,001 to €30,000
|
2%
|
|
€30,001 to €40,000
|
3%
|
|
€40,001 to €70,000
|
4%
|
|
€70,001 to €80,000
|
5%
|
|
Over €80,001
|
6%
|
COMMERCIAL PROPERTY FINANCE
Commercial property and investment portfolio finance is far more complex than standard residential property finance.
Valuation methodologies, levels of finance available, terms and structuring vary from business to business and industry to industry.
In addition, lenders often differ in their appetite for different types of deals e.g. sector, size of loan, margin and fees etc.
It is important to prepare a detailed funding proposal for target bank/(s). If you wish to discuss commercial property finance further, contact Philip Harvey at 01 4532755.
LEASING PROPERTY?
Leases tend to vary in duration with long leases tending to be for a term of 20 - 25 years incorporating provision for 5 year rent reviews. The traditional practice of upwards only rent review clauses in business leases was banned under section 132 of the Land and Conveyancing Law Reform Act. The section is operative from 28th February 2010. It is common practice for occupiers to negotiate an option is to terminate a letting agreement when entering a long lease and this is normally subject to formal written notice being served and possibly subject to a rent or rent plus outgoings penalty on exercising of same.
Leases are typically on a full repairing and insuring (F.R.I.) basis unless otherwise negotiated by the parties. This means that the tenant is responsible for all aspects of the building including the structure and the roof. Tenants are normally liable for local authority rates, landlords buildings insurance, own insurance (including public liability insurance), service charge (in the case of managed estates) and all other outgoings in relation to a property, in addition to the basic annual rent. Rents quoted by agents are normally on an exclusive basis i.e. exclusive of the foregoing mentioned additional occupational costs.
In recent years, a pattern emerged in the market whereby a large proportion of lettings have been on a short term basis. Short term leases in the Republic of Ireland are generally for a period of 4 years 9 months and would not normally incorporate a provision for rent review, unless otherwise agreed. This is due to the provisions contained in the Landlord & Tenant Acts, whereby a tenant gains a statutory right of renewal of their lease upon continuous occupation for over 5 years.
Leases are typically on a full repairing and insuring (F.R.I.) basis unless otherwise negotiated by the parties. This means that the tenant is responsible for all aspects of the building including the structure and the roof. Tenants are normally liable for local authority rates, landlords buildings insurance, own insurance (including public liability insurance), service charge (in the case of managed estates) and all other outgoings in relation to a property, in addition to the basic annual rent. Rents quoted by agents are normally on an exclusive basis i.e. exclusive of the foregoing mentioned additional occupational costs.
In recent years, a pattern emerged in the market whereby a large proportion of lettings have been on a short term basis. Short term leases in the Republic of Ireland are generally for a period of 4 years 9 months and would not normally incorporate a provision for rent review, unless otherwise agreed. This is due to the provisions contained in the Landlord & Tenant Acts, whereby a tenant gains a statutory right of renewal of their lease upon continuous occupation for over 5 years.
The Civil Law (Miscellaneous Provisions) Act 2008 now allows any tenant to contract out of its renewal rights. All business tenants, regardless of user, can waive landlord and tenant rights, strictly provided they receive independent legal advice prior to the commencement of the tenancy and sign a waiver.
Now, provided the formalities are properly followed, the landlord and tenant can seek to add another term at the expiry of an existing 4 year 9 month tenancy.
The rule changes will not affect existing tenancies as the pre-conditions for waiving renewal rights will not have been complied with, i.e. the tenants will not have signed a valid waiver after receiving prior independent legal advice before the commencement of the tenancy. Accordingly, the rule changes are not retrospective.
BUILDING ENERGY RATING (BER)
Since 1st January 2009, there is a legal requirement that when a non-domestic building is sold or let, a Building Energy Rating (BER) Certificate is required. This details its energy consumption and carbon dioxide emissions and is an extension of the legislation which has applied to new non-domestic buildings since 1st July 2008.
In order to carry out an assessment, information is required relating to the layout of the building, construction details and the Mechanical & Electrical (M & E) installations. For relatively new buildings this information may be readily available. However, for the majority of buildings this information will need to be obtained by way of a site survey by a suitably qualified party.
The obligation is on the property owner to commission and furnish a current BER Certificate on property being marketed for sale or letting from 1st January 2009. The Law requires that a Certificate be available before marketing commences so that intending purchasers or tenants can be advised of the properties energy rating. Both property owners and estate agents face prosecution for breaches of this legal requirement.
A BER certificate is required for the following classes of buildings with effect from the dates specified hereunder for each class:
a) New commercial buildings commencing on or after 1st July 2008;
b) Buildings of any class in existence at 1st January 2009 offered for sale or letting on
or after 1st January 2009.
NOTE - a) & b) above shall not apply to a new commercial building for which planning permission is applied for or a planning notice is published on or before 30th June 2008 and where substantial work is completed by 30th June 2010, except when such building is offered for a second or subsequent sale or letting.
VALUE ADDED TAX (VAT)
Value Added Tax (VAT) on property in Ireland was introduced in 1972.
The Finance Bill 2008 has introduced significant changes to VAT on property in Ireland. The changes became effective from 1st July 2008. Transitional rules were required to deal with, in particular, prevailing leases when the new rules commenced.
Considering the changes, it would be prudent for prospective purchasers/tenants to seek clarification on the incidence of VAT from their tax advisors.
BASIS OF MEASUREMENT
The Measuring Practice Guidance Notes are a recommended guide issued jointly by the Irish Auctioneers & Valuers Institute (IAVI) and the Society of Chartered Surveyors (SCS). Although not mandatory, they state that industrial buildings should be measured on a Gross External Area (GEA) basis which is the area of a building measured externally at each floor level. Detailed guidelines on items to be included or excluded are set out in the Guidance Notes.
Clear Internal Height (CIH) is defined as the height between the structural floor surface and the underside of the lowest point of the structural ceiling or roof.
Internal Eaves Height is defined as the height between the floor surface and the underside of the roof covering, supporting purlins or underlining (whichever is lower) at the eaves on the internal wall face.
COMMERCIAL RATES
What are Local Authority Rates?
Commercial rates are an annual tax levied by local authorities on the occupiers of commercial and industrial property. Local authorities levy commercial rates on the basis of valuations provided to them by the Valuation Office.
What is a Revaluation?
A revaluation is the production of an up-to-date Valuation List of all commercial and industrial property, within a rating authority area, by reference to current property rental values at a particular date.
Why have a Revaluation?
The existing Valuation Lists do not reflect the major shifts in property values that have occurred over the years. A revaluation will bring more equity, fairness and transparency into the local authority rating system by bringing valuations into line with current property rental values. This will ensure that local authority rates are assessed on the basis of an up-to-date list of valuations of commercial and industrial properties.
A revaluation will result in a redistribution of the commercial rates liability between ratepayers in a rating authority area based on current rental values.
SERVICE CHARGES
The majority of modern developments have management companies that are responsible for common area maintenance, common area insurance and often security. The items covered by management companies vary and accordingly service charges levied on occupiers can tend to differ. Service charges are normally levied on occupiers at a rate per square metre on a pro rata basis.
