When you avail a business loan for shop to buy a commercial property, you can claim a deduction at a flat rate of 30% of your taxable income invested in equipment and technology, as well as building materials involved in making repairs and renovating the commercial property. This can help you with tax savings.
Loan Interest Deduction:
If you’re buying or constructing a building for commercial purposes, you can avail the commercial shop loan and the interest you pay on your loan will be totally deductible. The fees related to obtaining a loan are also deductible in full. This can be claimed from the year during which you take possession after the construction is complete. You may also claim five equal instalments for any interest paid over a given year before taking possession of the commercial property.
Using commercial property for your business:
While you cannot claim any notional rental income-based deductions, it’s still possible to claim both depreciation and interest paid on your loan and/or another type of financing as tax deductions. As a business owner, you can avail a business loan for shop and claim all of the actual costs of maintenance and repairs in full.
Things to remember before buying a property:
– The neighbourhood you choose to buy your property in is very important. Doing a thorough analysis of the neighbourhood will help you find out about factors like the location’s convenience, potential pitfalls, etc.
– Another thing to consider when you’re searching for consumer or commercial property is whether the area is easily accessible by essential services like shops, hospitals and schools and what your commute might be like to those places.
– Similarly, it’s also important that you plan ahead by considering how long you might want to stay in this specific location as well as how far into the future you want to enjoy rental income or possible appreciation in value.
Buying a property is a big decision. It can be a very exciting one, but also a little worrying. One of the great benefits of availing a commercial shop loan and buying a property is that you can write off certain things against your taxes as mentioned in this blog!