Time to think about buying your business premises. Purchasing the premises for your business is a significant decision that can have far-reaching implications for both your operational efficiency and financial health. As a tax agent, I can provide insights into what you need to consider from a financial and tax perspective. This decision should align with your long-term business goals and financial strategy, so here are key considerations to bear in mind when thinking about buying your business premises.

Thinking of buying your premises and want to discuss finance, contact Steve at The Finance Brokers.

 Key Considerations for Buying Business Premises

1. Capital Investment vs. Cash Flow

  • Analysis: Buying property requires substantial upfront capital, which could otherwise be used for business expansion or improving operational capabilities. Assess your business’s cash flow to ensure it can support this investment without jeopardising day-to-day operations.

2. Tax Implications

  • Depreciation: The building and fixtures can be depreciated over time, offering tax deductions that can offset income.
  • Capital Gains Tax (CGT): When you sell the business premises in the future, CGT may apply to the sale. Planning for this eventuality is crucial.
  • GST Considerations: The purchase of commercial property generally involves GST, which can impact your upfront costs but may be claimable back if you’re registered for GST.

3. Financing the Purchase

  • Loan Conditions: Understand the terms of your business loan, including interest rates, repayment schedules, and any covenants imposed by lenders.
  • Impact on Credit: Taking out a loan to purchase property will affect your business’s credit capacity, potentially limiting future borrowing for other business needs.

4. Potential for Appreciation

  • Investment Perspective: Real estate can appreciate over time, providing your business with a valuable asset. Consider the location and market trends to gauge potential appreciation.

5. Flexibility for Business Needs

  • Adaptability: Owning your premises provides control over modifications or expansions as your business evolves. However, consider whether the property will continue to meet your needs as you grow or if market conditions change.

6. Ongoing Costs and Responsibilities

  • Maintenance and Upkeep: Unlike leasing, you’ll be responsible for all maintenance, repairs, and property improvements, which can be significant over time.
  • Insurance: Ensure you have adequate insurance coverage for your property, considering factors like building insurance, public liability, and natural disasters.

7. Exit Strategy

  • Resale or Leasing: Consider your long-term plans for the property. If your business outgrows the space, could it be easily sold or leased to another business?

 How We Can Help

Tax Planning

  • Tax Planning: We can help you understand the tax benefits, such as depreciation deductions and potential GST implications, and plan for CGT in the event of a sale.

Financial Analysis

  • Financial Analysis: Our team can provide a detailed analysis of how the purchase aligns with your business’s financial goals and cash flow projections.

Loan Advising

  • Loan Advising: We can offer guidance on financing options, helping you understand the implications of various loan structures.

Future Planning

  • Future Planning: Beyond the immediate tax and financial considerations, we can assist in integrating the purchase into your broader business strategy and long-term planning.


Engaging with a professional tax agent or financial advisor can provide you with the insights and guidance needed to make an informed decision, ensuring that the purchase aligns with both your current capabilities and your vision for the future of your business.