Commercial acquisitions and disposals
Mixed-use property purchase
Legal work to buy a building with business and residential parts, such as a shop with flats above or a pub with living accommodation.
Every cost on its own line: the law firm's legal fee, VAT, the searches and other third-party costs, and any property tax. Your quote opens as soon as you send the form.
Mixed-use treatment can lower the property tax, but only where the building genuinely includes a commercial part. Your solicitor confirms the treatment from the facts, and the online estimate is a guide until they do.
A mixed-use property combines commercial and residential space in one purchase. The classic example is a shop or café with a flat or two above, but it could also be a pub with living accommodation, a surgery attached to a house, or a farm with a farmhouse and business buildings.
These buildings need two sets of checks. Your solicitor looks at the commercial side, such as planning use, the business lease and VAT, and at the residential side, such as tenancies, safety certificates and the rights of any flat owners. The tax differs too: in England and Northern Ireland, the whole price is usually charged Stamp Duty Land Tax (SDLT) at the non-residential rates, which are often lower than the residential rates.
The instant online quote covers buildings like this. It asks about the property's use, any VAT on the price or a transfer of a going concern (a sale of a let business without VAT), the number of tenancies and the buyer, then estimates the property tax on the non-residential bands, using the VAT-inclusive price where VAT applies.
What is involved
Your solicitor works through the commercial and residential parts side by side:
- Title and plans: checking that the title covers the whole building, that the shop and each flat have the rights they need, such as separate access, and whether any flats have been sold off to leaseholders on long leases.
- Planning: confirming that both the commercial use and the flats are lawful, because upper floors converted without permission can cause problems with lenders and later buyers.
- The commercial lease: reviewing the rent, repair terms, arrears and whether the tenant has a right to a new lease under the Landlord and Tenant Act 1954.
- Residential tenancies: checking each agreement, deposit protection, gas and electrical safety records, the energy performance certificate and any licence the council requires.
- Right of first refusal: where two or more flats are held by long leaseholders, checking whether the seller had to offer them the chance to buy the building first under the Landlord and Tenant Act 1987.
- Searches and enquiries: local, drainage and environmental searches and the standard commercial enquiries, with extra questions about the flats.
- Your lender: reporting on title and meeting any conditions the lender sets for mixed-use security.
- Tax and completion: confirming the SDLT or LTT treatment and any VAT on the commercial part, then completing, notifying tenants and registering your ownership.
What the legal fee covers
- Investigating the title to the whole building and any separate flat titles
- Checking planning use for the commercial and residential parts
- Reviewing the commercial lease and each residential tenancy agreement
- Checking deposit protection and safety paperwork for let flats
- Considering whether a tenants' right of first refusal applied to the sale
- Commercial enquiries and the standard searches
- Acting for your mortgage lender and reporting on its conditions
- Calculating and filing the SDLT or LTT return
- Completion and registration of your ownership
Costs you may see on top
- Searches, including any extra reports the commercial use calls for
- Registration fees for your ownership of the building and the new mortgage
- Property tax on the whole price at the non-residential rates, including any VAT on the commercial part
- VAT on the commercial part of the price, if the seller has opted to tax
- Your lender's valuation fee and any separate legal fees
- Safety work or certificates needed to meet residential letting rules
- Extra legal work for each additional tenancy or flat title
What to have ready
- The agreed price and whether it has been split between the commercial and residential parts
- Who is buying: individuals, a company or a partnership
- Your lender and broker, and confirmation the lender knows the property is mixed-use
- Identity documents for everyone buying, or for the directors if a company is buying
- Your plans for the building, such as living in a flat or letting every part
- Any tenancy details or rent schedule the agent has already sent
- Bank statements or other proof of the deposit and the rest of the purchase money
How long it takes
A mixed-use purchase often takes 10 to 16 weeks from instruction to completion, a little longer than a purely commercial deal, because there are more documents to check and more people involved. Delays commonly come from missing tenancy paperwork, gaps in the planning history of the flats, lender conditions for mixed-use security and, where long leaseholders live in the building, the right of first refusal procedure. Getting your mortgage approved early and asking the seller for tenancy and safety documents at the outset are the most reliable ways to keep things moving.
Things to watch for
- Check that the flats have planning permission for residential use. Upper floors converted without consent can cause problems with your lender, your insurer and future buyers.
- In England, the Renters' Rights Act 2025 turned existing assured shorthold tenancies into periodic assured tenancies (with no fixed end date) from 1 May 2026 and ended section 21 'no-fault' notices. If you buy with residential tenants, plan on the basis that they will stay unless the law gives you a specific ground for possession.
- Not every lender offers mixed-use mortgages, and those that do may lend less against the value or ask for a larger deposit. Speak to a broker before you commit to a price.
- Mixed-use status for SDLT depends on the facts. A house does not become mixed-use just because it has a paddock or a large garden, so be wary of anyone promising a tax saving without a genuine commercial use.
- An option to tax (the seller's choice to charge VAT) does not cover the flats, so where VAT applies it is usually charged only on the commercial part of the price. The contract should make that split clear.
Questions people ask
How much SDLT will I pay on a shop with a flat above?
In England and Northern Ireland, mixed-use property usually pays SDLT at the non-residential rates: 0% up to £150,000, 2% from £150,001 to £250,000 and 5% above that. For example, on a £400,000 building the SDLT would be £9,500. The higher rates for additional homes do not apply, and nor does the 2% surcharge for non-UK residents. Any VAT on the commercial part is added to the price before the tax is calculated. See stamp duty and property tax.
Is it different in Wales?
In Wales, Land Transaction Tax on a mixed-use purchase is charged at the non-residential rates, and the higher residential rates do not apply. Your solicitor confirms how the rules apply to you.
What happens to the tenants when I buy?
Existing tenancies normally carry on, with you as the new landlord. Your solicitor checks each agreement, the rent, any arrears and where deposits are held, and the residential tenants must be given your name and an address for notices. Deposits need to remain protected in an approved scheme. If you want any part empty when you complete, that has to be agreed with the seller in the contract, not assumed.
Can I live in one of the flats?
Yes, many owners live above their own business. Tell your solicitor and lender early, because it affects the type of mortgage you need and how the property is valued and insured.
Who does the work
Your matter is handled by a law firm regulated by the Solicitors Regulation Authority, the Council for Licensed Conveyancers or CILEx Regulation, or in Northern Ireland by a solicitor regulated by the Law Society of Northern Ireland. At the moment the law firms on our panel act for property in England and Wales, so for property in Northern Ireland we tell you whether a firm can act for you before we pass your details to anyone. The firm confirms who will work on your file, their experience and its terms before you instruct it. How we choose our firms.