Can you invest in UK commercial property from Latin America?

Why this guide exists

Almost everything published in Spanish about investing in the United Kingdom is about rented housing. That is reasonable: it is the largest market and the easiest to start in. But every time a client with an established portfolio asks about commercial —a unit let to an operator, a ground-floor retail space, a small industrial asset— they find nobody explains it in their language.

Acacias works on commercial property on request, by mandate. It is not a catalogue product and we hold no stock to place: it is an engagement accepted when the client's profile and the asset justify it, and where the buyer is the one paying our fee. The difference matters and we explain it in the costs guide.

What changes against residential?

How much Stamp Duty do you pay on commercial?

The non-residential scale applies, which has three bands and has not moved since March 2016. It is the most quantifiable difference in this whole guide, and the one almost nobody mentions.

On top of that scale neither the 5% additional property surcharge nor the 2% non-residence surcharge is added: both belong to residential. On the same purchase price of one million pounds, the contrast is this:

• Commercial: £0 on the first £150,000, £2,000 on the next band and £37,500 on the rest. Total, £39,500.
• Housing bought by a non-resident who already owns another property: £113,750, applying the residential scale with both surcharges.

Seventy-four thousand pounds of difference at entry, on the same price. It does not make commercial the better investment, but it changes where the calculation starts.

Two points that prevent mistakes. First: buying six or more dwellings in a single transaction can be taxed on the non-residential scale, as can mixed-use assets. Second: where what is acquired is a lease rather than the freehold, Stamp Duty is also computed on the net present value of the rents committed, not only on the premium. The full residential scale, with its two surcharges, is in the tax guide.

How does a commercial lease work?

This is where the structural difference lies. A residential tenancy is set by statute and, since 1 May 2026, all of them are periodic and without Section 21. A commercial lease, by contrast, is negotiated between two businesses, and the contract decides almost everything.

• The term is longer, with agreed exits. The norm today is three to ten years with break clauses on set dates, not the straight fifteen years cited a decade ago. That shift has already happened and it is worth not calculating on the old figure.
• Operating costs usually fall on the tenant. Under a full repairing and insuring lease, the tenant pays the repairs, the insurance and the rates. It is the main reason the same gross yield means different things in commercial and in residential.
• Rent is reviewed periodically, usually every three or five years, by whatever mechanism the lease sets.
• The tenant may have a right to renew. Part II of the Landlord and Tenant Act 1954 gives a business tenant security of tenure, unless the parties expressly contract out on signing. Whether a lease is contracted out is one of the first questions in due diligence.
• When the unit is empty, the rates come back to the owner after a short exemption period. Vacancy in commercial does not just stop paying: it starts costing.

There is a change under way worth keeping on the radar. The English Devolution and Community Empowerment Act received royal assent on 29 April 2026 and contains a ban on upward-only rent reviews in business leases in England and Wales. It is not yet in force —it depends on later regulations and is expected during 2027— it does not reach leases already signed, and it has a limited retrospective component: leases entered into from 17 March 2026 that include a renewal option will be caught by the ban in the renewed lease.

We say so because it changes a line used for years as a sales argument: that British commercial rent could only go up. That will stop being true for new leases, and anyone calculating on that premise is calculating on a rule with an expiry date.

Is there VAT on a commercial purchase?

There can be, and it belongs in the budget from the start: on housing it simply does not exist.

• A new commercial building, less than three years old, is compulsorily sold with VAT.
• An older building is exempt, unless the seller has exercised the option to tax over that property. If they have, 20% is added on the price and then on the rent.
• Input VAT can be recovered if the buyer registers for VAT and exercises the option in turn. But it has to be funded first: it is a real outlay at completion.
• Where the asset is sold let and operating, the deal can be treated as a transfer of a going concern and fall outside the scope of VAT, if the conditions are met. It is one of the things checked before signing, not after.

On top of that, where a deal carries VAT, Stamp Duty is computed on the VAT-inclusive price. It is a detail that throws budgets out regularly.

Does the inheritance tax treatment change?

It does, and it is the least published difference. The look-through rule in Schedule A1 of the Inheritance Tax Act 1984 —the one that stops a non-British company taking an asset out of inheritance tax— refers to residential property since 6 April 2017, and since 6 April 2026 to agricultural property too, following the extension announced in the Autumn Budget 2025. Commercial property sits outside that mechanism today.

The fact is real and it is relevant. But it reads better alongside the previous one: the rule has already been widened once, and the direction of travel is what it is.

What follows from that is a note of caution, not a recipe. An ownership structure is decided on the whole picture —composition, participants, asset class, horizon, jurisdiction of incorporation, succession intention— and not on a single advantage a legislator can revisit in one budget. Any approach in this direction requires a British tax adviser and an adviser in the country of residence, before buying. We go into it in the structures guide and in the holding company guide.

And capital gains on sale?

On a direct sale of the property there is no separate commercial scale: since 6 April 2019 a non-resident is taxed on the gain on any British land or property, commercial included. Before that date the rule reached only housing, and material written under the old framework is still doing the rounds.

An indirect sale —transferring shares in the company rather than the property— runs on different rules, and there there is analysis to do. The 2019 rule catches someone selling shares in a UK property-rich company, meaning one in which 75% or more of the gross value of its assets is British land or property. But it does not catch every shareholder: it bites where the seller holds, or has held in the previous two years, an interest of 25% or more, counting connected persons' holdings too.

Two thresholds, 75% of the assets and a 25% interest. Neither is met by default, and much of the outcome of an exit depends on them.

We do not publish a particular configuration here, because there is none that fits everyone: it depends on how many owners come in and in what proportions, on what else the company holds, on where each participant lives and on which treaty applies to them. That is the work we do with the client's tax adviser, and it is a conversation about a case, not a paragraph in a guide. What is worth knowing in advance is that the structure is designed before buying: redoing it afterwards costs, and sometimes is no longer possible.

One operational note that is often forgotten: the British return on the sale is filed within a short window from completion, whether or not there is tax to pay.

And financing?

Commercial lending is assessed differently: what weighs is the quality of the tenant, the unexpired term of the lease and the cover of debt service by the rent, more than the buyer's personal profile. Loan-to-value ratios tend to be more conservative than in residential and the number of lenders that will lend to a non-resident with no British record is smaller. The general requirements we can document are in the mortgage guide.

So, is it worth it?

It depends what you are looking for, and the honest answer has both sides.

• In favour: a cheaper tax entry, longer leases, operating costs usually on the tenant, and a tenancy framework that is negotiated rather than imposed.
• Against: vacancy costs more and lasts longer, risk concentrates in a single tenant instead of being spread, the asset is less liquid, VAT demands funding cash, and financing is more demanding.

As a general rule: commercial fits better into a portfolio that already has size and horizon, and worse as a first British deal. That is why we offer it by mandate and not as an entry point.

Related questions

Sources

General information drawn from the official sources listed at the end. This describes the framework applying in England; Scotland, Wales and Northern Ireland have their own regimes. It is not tax, legal or financial advice, nor an invitation to invest. The value of a property investment can fall as well as rise. Acacias Capital Ltd is not authorised or regulated by the FCA.