The default position is that sales of commercial property are exempt from VAT — but that exemption can be switched off. A seller can make an "option to tax" on the building, which turns the sale (and usually subsequent rents) into a standard-rated 20% supply, so your £180,000 office could come with an extra £36,000 of VAT on top. The key step is to ask the seller or their agent, in writing, whether an option to tax is in place before you agree a price — agents' "may or may not apply" is not good enough when 20% is at stake. If the building is being sold with tenants in place as a continuing business, the Transfer of a Going Concern (TOGC) rules can apply, meaning no VAT is charged at all provided the conditions are met (including that you are VAT registered and opt to tax yourself). As a VAT-registered buyer using the office for your taxable business, any VAT charged is generally reclaimable on your return, so it is mainly a cash-flow and funding question rather than a cost — but if you are not registered, it becomes a real extra cost. Get confirmation of the VAT position in the contract and take advice before exchange.
