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D8
New-Build vs Second-Hand (Allowances)
New-build and second-hand commercial property attract different capital allowances and carry different EPC and dilapidations positions. The tax reliefs can tip the decision.
Compare your options
New-build commercial
Pros
- Full expensing available to companies on new plant
- SBA on the full construction cost
- Typically EPC-compliant
Cons
- Higher price per square foot
- Less established location or tenant demand
- Premium for the new spec
Best for: Companies wanting the full stack of allowances and a compliant building.
Second-hand
Pros
- Lower price per square foot
- AIA still available on qualifying plant
- SBA on unrelieved original construction cost
Cons
- Full expensing not available on second-hand assets
- May need EPC and MEES works
- Higher dilapidations and repair risk
Best for: Value-add buyers comfortable with works, using AIA and a fixtures survey.
Worked scenarios
Company buyer comparing a new unit and an older one
| Option | Outcome |
|---|---|
| New-build | Full expensing plus SBA can materially cut the effective cost. |
| Second-hand | Cheaper up front; commission a capital allowances survey to capture relief. |
Decision checklist
- Commission a capital allowances survey on any purchase to capture integral features.
- Check the EPC and any MEES works needed on a second-hand building.
- Model the allowances (AIA, full expensing where available, SBA) into the net cost.
- Factor likely dilapidations and repair spend on older stock.
Relevant tools
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