Commercial property yield calculator (UK)
Agents usually quote yields with a standard 6.8% allowance for costs. Enter a price and a rent to see the yield with the actual property tax for England, Wales or Scotland.
This calculator runs in your browser. It stores nothing. It is a guide, not advice.
For the full method, the things that change the answer and how to compare with the market, read our guide: How to work out the real yield on a UK commercial property.
Gross yield and net initial yield
Gross yield is the simplest figure. Divide the yearly rent by the price.
£58,000 rent ÷ £850,000 price = 6.82%
Net initial yield (NIY) is what the market uses. It divides the rent by the price plus the costs of buying. Those costs are stamp duty (or its Welsh or Scottish version) and fees for agents, solicitors and surveyors.
NIY = yearly rent ÷ (price + buying costs)
Because the costs make the bottom number bigger, the NIY is always lower than the gross yield.
One point before we go on. "Net" here means net of buying costs. It does not take off running costs. On a full repairing and insuring (FRI) lease the tenant pays for repairs and insurance, so the rent is close to what you keep. On other leases you may pay some costs yourself. Check the lease.
The 6.8% convention
In UK commercial property, agents and valuers commonly assume buying costs of 6.8% of the price. One valuation guide says costs are "typically 6.8% of the purchase price, which includes a stamp duty of 5%" (Leveraged Breakdowns). The other 1.8% is generally taken to cover professional fees and VAT on those fees.
So a brochure yield is usually:
Rent ÷ (price × 1.068)
For our £850,000 shop with £58,000 rent, that gives 6.39%.
The convention lets everyone compare lots on the same basis. But stamp duty is not a flat 5%. It is charged in bands, so smaller lots pay much less than 5% of the price.
The actual tax rates (checked 18 October 2026)
England and Northern Ireland share one tax. Wales and Scotland each have their own. These are the rates for buying non-residential property.
England and Northern Ireland: Stamp Duty Land Tax (SDLT) (GOV.UK)
| Part of the price | Rate |
|---|---|
| Up to £150,000 | 0% |
| £150,001 to £250,000 | 2% |
| Above £250,000 | 5% |
Wales: Land Transaction Tax (LTT), for purchases from 22 December 2020 (Welsh Government)
| Part of the price | Rate |
|---|---|
| Up to £225,000 | 0% |
| £225,001 to £250,000 | 1% |
| £250,001 to £1,000,000 | 5% |
| Above £1,000,000 | 6% |
Scotland: Land and Buildings Transaction Tax (LBTT), for purchases from 25 January 2019 (Revenue Scotland)
| Part of the price | Rate |
|---|---|
| Up to £150,000 | 0% |
| £150,001 to £250,000 | 1% |
| Above £250,000 | 5% |
Each rate applies only to the part of the price inside that band. GOV.UK gives this example: a £275,000 freehold in England pays £0 on the first £150,000, £2,000 on the next £100,000 and £1,250 on the last £25,000. That is £3,250 in total.
If you are granted a new lease, tax on the rent is worked out in a different way. The bands above are for the price you pay.
Worked examples
In each example below we use the actual tax, plus fees of 1.8% of the price. The 1.8% is only an assumption to make the examples comparable. Use the quotes you get from your own solicitor and surveyor.
Example 1: a £300,000 shop with £24,000 rent
- Gross yield: 8.00%
- Brochure yield with the 6.8% allowance: 7.49%
| Figure | England | Wales | Scotland |
|---|---|---|---|
| Tax | £4,500 | £2,750 | £3,500 |
| Tax as % of price | 1.50% | 0.92% | 1.17% |
| Fees at 1.8% | £5,400 | £5,400 | £5,400 |
| Total cost | £309,900 | £308,150 | £308,900 |
| Net initial yield | 7.74% | 7.79% | 7.77% |
On a lot this size, the real yield is about 0.25 percentage points above the brochure figure.
Example 2: an £850,000 convenience store with £58,000 rent
- Gross yield: 6.82%
- Brochure yield with the 6.8% allowance: 6.39%
| Figure | England | Wales | Scotland |
|---|---|---|---|
| Tax | £32,000 | £30,250 | £31,000 |
| Tax as % of price | 3.76% | 3.56% | 3.65% |
| Fees at 1.8% | £15,300 | £15,300 | £15,300 |
| Total cost | £897,300 | £895,550 | £896,300 |
| Net initial yield | 6.46% | 6.48% | 6.47% |
The gap is smaller here. The higher the price, the closer the tax gets to 5%.
Example 3: a £2,000,000 industrial unit with £130,000 rent
- Gross yield: 6.50%
- Brochure yield with the 6.8% allowance: 6.09%
| Figure | England | Wales | Scotland |
|---|---|---|---|
| Tax | £89,500 | £97,750 | £88,500 |
| Tax as % of price | 4.47% | 4.89% | 4.42% |
| Fees at 1.8% | £36,000 | £36,000 | £36,000 |
| Total cost | £2,125,500 | £2,133,750 | £2,124,500 |
| Net initial yield | 6.12% | 6.09% | 6.12% |
At £2 million the real yield and the brochure yield are almost the same. In Wales, the 6% band above £1 million means the tax is close to the allowance.
What the calculator does not cover
The bands are for the price you pay. If you are granted a new lease, tax on the rent is worked out in a different way.
The calculator does not add VAT. If VAT is charged on the price, stamp duty is worked out on the VAT-inclusive price (HMRC SDLTM03800).
Sources
Tax bands checked on 18 October 2026.
- England and Northern Ireland, SDLT: www.gov.uk/stamp-duty-land-tax/nonresidential-and-mixed-rates
- Wales, LTT: www.gov.wales/land-transaction-tax-rates-and-bands
- Scotland, LBTT: revenue.scot/taxes/land-buildings-transaction-tax/non-residential-property
- 6.8% cost allowance: www.leveragedbreakdowns.com/2023/06/21/commercial-real-estate-valuation-methods
Get told when a match is listed
YieldBell is a new AI tool, now in testing. It will email you when a commercial property that fits your brief comes up for sale. Book a call to tell us what you buy.
With Kunal, the founder, on Google Meet. No payment, no sales pitch.