Commercial Property Seminar Discusses Current Market and Tax Issues

15/07/2009

The key message arising from a recent seminar on commercial property opportunities and tax issues, is to take tax advice early to ensure that your assets are held in the right structure or ownership and to consider all tax implications and commercial aspects.  It was also noted that prospects for the commercial property sector were notably brighter than earlier in the year.

The seminar, held at the Old Albanian Sports Club in St Albans and attended by property investors, developers, property lawyers and bankers, was organised by accounting, tax and business recovery and advisory group, Vantis and property consultants Aitchison Raffety.

Anne-Maree Dunn, Vantis tax partner, discussed the importance of capitalising on tax opportunities and how to maximise tax credits and relief.  She told delegates that the corporate and personal tax landscape was changing dramatically and she demonstrated the importance of choosing the correct acquisition vehicle with the subsequent impact of tax on rental returns, capital appreciation and capital sale.  Anne-Maree also discussed the importance of maximising deductions against rent and ensuring a thorough schedule of works when refurbishing.

Vantis VAT partner, Vaughn Chown, provided an update on VAT, looking at the changes in the 2009 Budget and the new tax penalty regime, whilst Mark Bunting, director, Aitchison Raffety gave a market update.

Bunting reviewed some of the reasons for the collapse of the property market and then summarised its current state.  He indicated that there has been an increase in tenant demand in recent weeks for industrial property.  Although rents on industrial units have not dropped significantly, there has been a move to offering added incentives to incoming tenants.   There is currently less demand for freehold industrial units due, in part, to ongoing funding problems.

Although several retail chains have gone into liquidation, the local retail market has not been so badly affected and there is still good demand for prime locations, particularly as rents had dropped substantially.

The residential market in the Hertfordshire area looks to be recovering.  Supply was down by 50 per cent from its peak, but there is now reasonable demand and prices are rising.

The office market appears to be lagging behind, as buyer appetite had disappeared and, in the rental sector, the increasing supply and lack of demand is leading to increasingly good deals, as rents are dropping and incentives increasing.

The investment market is still experiencing funding problems, but industrial investments were faring better than office properties, whilst the retail investment market seems very dependant on fundamentals – tenant/lease/location.

In conclusion, the three speakers agreed that, in the current climate, it is vital to keep reviewing property portfolios, how they are held and the consequences of tax changes.

Picture shows from left: Mark Bunting, Aitchison Raffety, Anne-Maree Dunn and Vaughn Chown, Vantis.

For further information, please contact Aitchison Raffety on 01727 843232 or Vantis on 01727 838255 or www.vantisplc.com