Commercial and industrial conveyancing involves more than transferring title. GST, existing leases, zoning, contamination and building compliance all affect what the property is worth and how you can use it. We act for buyers and sellers of shops, offices, warehouses, factories and mixed use property in six states.
How does GST apply to commercial property sales?
A sale by a GST registered seller is usually a taxable supply unless an exemption applies. The contract must say whether the price includes or excludes GST, or one party can end up carrying the full GST amount.
Sale of a going concern
The sale can be GST-free as a going concern if the seller supplies everything needed to continue the enterprise (for a tenanted property, the leasing enterprise), the seller carries on that enterprise until settlement, the buyer is registered or required to be registered for GST, and both parties agree in writing that it is a going concern sale. A vacant property usually does not qualify.
Margin scheme
The margin scheme lets an eligible seller calculate GST on the margin rather than the full price. It must be agreed in writing, and a buyer who acquires under the margin scheme cannot claim an input tax credit for the GST. Your accountant confirms the GST position, and we draft the contract to match.
What happens to existing leases when the property is sold?
Leases disclosed in the contract continue after the sale, and the buyer steps into the landlord’s position, bound by the tenant’s rights under each lease, including options to renew and rent reviews.
Buyers should check every lease against the tenancy schedule, including rent, outgoings, expiry, options, arrears and security. Bonds and bank guarantees need to be transferred or reissued. Retail leases carry extra obligations under each state’s retail leasing legislation. See commercial and retail leasing and our guide on options to renew.
How do you check zoning and permitted use?
Zoning decides whether your intended use is allowed, needs approval or is prohibited. We obtain the planning information for the site and check existing approvals against how the property is actually used. An unapproved use can stop a business operating.
Why do environmental and contamination checks matter?
Because an owner can become responsible for cleaning up contamination a previous occupier caused. Industrial sites and former service stations carry the highest risk. State environment protection authority registers are a starting point, and higher risk land may need an environmental site assessment.
What building compliance should be checked?
Check that buildings have the required approvals and that fire safety measures are maintained and certified as your state requires. Outstanding notices, unapproved works, asbestos and non-compliant cladding can become the new owner’s responsibility.
Is stamp duty payable on commercial property?
It depends on the state. South Australia no longer charges duty on transfers of qualifying non-residential land, Victoria is phasing in an annual commercial and industrial property tax in place of duty, and other states still charge transfer duty. We confirm the position with the relevant revenue office.
Can I buy commercial property with finance or through an SMSF?
Yes. Commercial lenders often want valuations and lease information before approving finance, so allow time in the finance condition.
A self managed super fund can buy commercial property, and business real property can be leased to a related business at market rent. If the fund borrows, it must use a limited recourse borrowing arrangement, usually with a separate holding trust, and the purchase must be in the correct names from the start. Your accountant or adviser sets the structure, and we handle the conveyancing to match.
What if I am buying a business with the property?
When a business and its premises are sold together, the property contract and business sale agreement need to work together on price allocation, GST, settlement timing and employees. See buying and selling a business and our guide to buying commercial premises.
Common questions about commercial property conveyancing
Is there a cooling-off period for commercial property?
Generally no. Statutory cooling-off rights in most states apply to residential property, and commercial and industrial purchases usually do not have them. That means your due diligence on leases, zoning, building compliance and GST needs to be done before signing, or protected by specific conditions in the contract such as a due diligence period.
Do I pay GST on a commercial property purchase?
Usually, if the seller is registered for GST and the sale is not GST-free. A GST registered buyer may be able to claim it back as an input tax credit. A going concern sale is GST-free, and under the margin scheme GST is calculated on the margin and the buyer cannot claim an input tax credit.
What is a tenancy schedule?
A tenancy schedule is a summary of every lease in a property, usually listing each tenant, the area leased, rent, outgoings recovery, lease start and expiry, options and security held. Buyers rely on it to assess income, so it should be checked against the actual leases, and the contract should include warranties that it is accurate.
Can my SMSF lease commercial property to my business?
Generally yes, if the property is business real property and the lease is on arm’s length terms at market rent. This is one of the main exceptions to the rules restricting SMSF dealings with related parties. Your accountant or financial adviser should confirm the arrangement complies with superannuation law before you proceed.