# VAT Bridging Loans for Commercial Property Source: https://www.cashbookfinance.co.uk/blog/vat-bridging-loans Last updated: 2026-10-03 > How a VAT bridging loan funds the VAT on a commercial property purchase until HMRC repays it - when VAT applies, timings, risks and what to prepare. ## VAT bridging loans for commercial property. When a commercial property is sold with VAT charged (for example, where the seller has opted to tax), the buyer must pay VAT on top of the price at completion, even if they can reclaim it later. A VAT bridging loan is a short-term loan that funds that VAT until HMRC repays it, typically a few months later. Written by [Bjorn Laku](https://www.cashbookfinance.co.uk/bjorn-laku), Director & CMO. Reviewed by the Cashbook Finance lending team. ### Three things to confirm before completion. The VAT element only works as a bridge if it will genuinely be recovered. VAT applies #### Is VAT charged? VAT can apply where the seller has opted to tax or the building is new; a transfer of a going concern may mean no VAT at all. Recovery #### Can you reclaim it? The buyer needs to be VAT-registered and, where needed, to have opted to tax so the VAT can be reclaimed. Timing #### When will HMRC repay? Delays in registration or HMRC checks extend the loan and its cost. ### Raise the VAT position at the start. Share the purchase, the VAT treatment and your registration status, and we will give you a straight view on how the funding could be structured. ### The VAT is due at completion even if it is reclaimed later. When VAT is charged on a commercial property, the buyer pays it on top of the price at completion. A VAT bridge funds that amount until the reclaim is repaid, typically a few months later. If the VAT cannot be recovered, or recovery is delayed, the bridge has no natural exit. That is why the VAT position needs confirming by your solicitor and tax adviser before terms are agreed. - Confirm whether VAT is charged or a transfer of a going concern applies - Check VAT registration and the option to tax - Allow a realistic time for HMRC to repay ### Check the VAT bridge has a clear exit. The reclaim is the repayment route, so it has to be reliable. #### Charge VAT confirmed as payable on the purchase. #### Recovery Registration and option to tax in place. #### Timing A realistic repayment date, with headroom. Illustrative guidance only; eligibility, pricing and terms are confirmed after review. Bridging finance is secured against property. Your property may be repossessed if you do not maintain repayments on a loan secured against it. Take independent tax advice on VAT. **Related guidance:** [Bridging finance](https://www.cashbookfinance.co.uk/bridging-finance) · [Pricing & decisions](https://www.cashbookfinance.co.uk/pricing-decisions) · [Eligibility](https://www.cashbookfinance.co.uk/eligibility) · [Case studies](https://www.cashbookfinance.co.uk/funding-scenarios) ### More guides on bridging finance - [Regulated vs unregulated bridging](https://www.cashbookfinance.co.uk/blog/regulated-vs-unregulated-bridging-loans) - [Bridging finance exit strategies](https://www.cashbookfinance.co.uk/blog/bridging-finance-exit-strategy-guide) - [Bridging finance glossary](https://www.cashbookfinance.co.uk/blog/bridging-finance-glossary) - [Bridging finance LTV guide](https://www.cashbookfinance.co.uk/blog/bridging-finance-ltv-guide) - [Bridging finance valuations](https://www.cashbookfinance.co.uk/blog/bridging-finance-valuation-guide) - [Bridging finance vs commercial mortgage](https://www.cashbookfinance.co.uk/blog/bridging-finance-vs-commercial-mortgage) --- Cashbook Finance. Cashbook Finance Limited is registered with the Financial Conduct Authority under Firm Reference Number 782472. Company number 10723098. Registered office: Cumberland House, 24–28 Baxter Avenue, Southend-on-Sea, Essex SS2 6HZ. Registered with the Information Commissioner’s Office under reference ZB545200. All finance is subject to eligibility, satisfactory due diligence, credit approval and agreed terms. Invoice finance, trade finance and bridging finance may not be suitable for every business. The availability, structure, amount, pricing, fees, security requirements and completion timescales of any facility will depend on the applicant’s circumstances, the quality of the supporting evidence provided and our assessment of the proposed transaction. Any figures, examples, rates or timescales shown on this website are for illustrative purposes only and do not constitute an offer, commitment or guarantee of finance. Terms and conditions apply. Bridging finance is secured against property. Your property may be repossessed if you do not maintain repayments on a loan secured against it. Applicants should obtain independent legal, financial and tax advice where appropriate.