Property owners could lose an estimated £72m in unused capital allowances tax relief according to Catax Solutions.

The UK capital allowances specialist says the sum could be lost if the 4,000 office-to-residential conversions given the green light between April 2014 and June 2015, go ahead.

Catax Solutions said the lack of understanding surrounding capital allowances will see the value of lost tax relief rise further following the announcement that Permitted Development Rights will be made permanent.

Capital allowances are a form of tax relief available to anyone incurring capital expenditure when building, buying or refitting commercial property, but Mark Tighe, Managing Director of Catax Solutions, said they can be complex.

“It’s important the message here is a simple one: if you are considering converting a commercial property into a residential one, or selling it onto a residential developer, then you need to make a capital allowances claim before or at the point of sale or before work begins,” said Mark.

“If you don’t, you will instantly lose potentially tens or even hundreds of thousands of pounds of tax relief.”

Based on more than £500m worth of tax relief Catax has secured for over 7,000 clients, nine in 10 commercial property owners have not made a capital allowances claim due to a lack of awareness.

“Given the current housing shortfall, relaxing the planning rules to allow more office-to-resi conversions make sense, but it doesn’t make sense for commercial property owners to not receive the tax relief that is their right by law,” added Mark.

“But if they rush into converting property without making a claim, this is exactly what could happen.”