Should Your Business Buy Its Premises? Finance and Structure

Buying your business premises can secure your location and turn rent into equity, but it ties up capital and adds a second set of risks to your business. Lenders assess it as an owner-occupied commercial loan, usually looking at the business’s financials and a market rent paid to the owning entity. Ownership structure matters as much as the loan.

When does buying make sense?

• Your business needs a specific location for many years, such as a medical or dental practice.
• Rent is rising and a purchase costs a similar amount each month.
• The business has steady profits and the deposit will not starve it of working capital.
• You want the business and the property to be separately sellable later.

Leasing suits businesses that may grow, move or change format, or that need cash for stock and staff more than for property.

Who should own the property?

Commonly not the trading business itself. Many owners hold the premises in a separate entity, such as a family trust or an SMSF, which leases it to the business at market rent. That can protect the property from the business’s risks and makes each easier to sell. Get advice from your accountant on tax and asset protection; the trust and company lending page covers how lenders treat these structures.

Can an SMSF buy business premises?

Yes. After 10 August 2026, a self managed super fund can still borrow under a limited recourse borrowing arrangement to buy business real property, which includes premises used wholly and exclusively in a business. Your business can lease it from the fund at market rent. The rules are strict, so get SMSF advice; the SMSF loans page explains the lending side.

How do lenders assess an owner-occupied commercial loan?

• Two years of business financials and tax returns.
• The property’s value and use.
• A lease from the business to the owning entity, at market rent.
• The owners’ personal position and other debts.
• Often a larger deposit and a shorter term than a home loan.

The commercial property loans page explains commercial assessment and GST, and the consulting rooms loans and office property loans pages cover specific premises.

Can you use your home as security?

Yes, equity in your home can fund the deposit or reduce the commercial loan, often at a lower rate. It also puts your home at risk if the business fails, so weigh that carefully. Keep borrowing for the premises in separate loans.

Questions people ask

Is it better to buy or lease business premises?

It depends on how long you need the location, your cash flow and your plans. Many owners buy once the business is stable.

How much deposit do I need for a commercial property?

Usually more than for a home, depending on the property, the business and the lender.

Can my super fund buy my business premises?

Yes, if it is business real property used in a business, and the fund can borrow to do it under the rules that apply from 10 August 2026.

Do you pay stamp duty when a business buys property?

Yes. In NSW, transfer duty applies to commercial property at the general rates, and first home buyer concessions do not apply. GST can also apply unless the property is sold as a going concern, so ask your accountant before you sign.

Charles Touma compares owner-occupied commercial loans and works with your accountant on the ownership structure. A free 30-minute call covers it. General information only, not credit, tax or financial advice; every loan is subject to the lender’s assessment.

Sources: ATO, changes to SMSF borrowing from 10 August 2026; ASIC, Regulatory Guide 209, checked 18 October 2026.

General information only, not credit, legal or tax advice. Your situation is assessed properly before any recommendation. Government scheme details change; figures are current at the time of writing.