For many Canberra business owners, there comes a point when they start questioning whether continuing to pay commercial rent makes sense, or whether that money could instead be going towards owning their business premises.
Buying won’t be the right move for every business. Renting can provide flexibility, particularly for newer or rapidly changing businesses. But for an established business with stable cash flow and longer-term plans, owning commercial property can provide greater control over your premises while building equity in an asset over time.
Changes to ACT conveyance duty in 2026 have also reduced one of the significant upfront costs for many commercial property purchases.
This guide looks at how commercial property loans work, the differences between commercial and residential lending, and what Canberra business owners should consider when deciding whether to rent or buy.
The rent vs buy comparison for Canberra businesses
Deciding whether to rent or buy commercial premises isn’t simply a matter of comparing your current rent with a potential loan repayment.
Renting can provide flexibility and require less capital upfront, which may be particularly valuable for newer businesses or businesses expecting their space requirements to change.
Owning, however, can offer some important advantages for established businesses.
- Greater certainty: Owning your premises can reduce your exposure to lease renewals and future rent increases. Your loan repayments and costs will still depend on your loan structure, interest rates and the ongoing costs of owning the property.
- Control and customisation: Ownership can give you greater control over your fit out, signage and use of the premises, subject to planning, zoning, strata and other relevant requirements.
- Building an asset: Rather than paying rent to occupy a property, part of your loan repayments may reduce the loan principal and gradually build equity in the property.
- Long-term security: Owning can reduce the risk of needing to relocate because a lease isn’t renewed or the property owner’s plans change.
The right decision will depend on your business, available capital, cash flow, property requirements and longer-term plans.
The $2.1 million commercial duty threshold
One significant consideration for Canberra businesses looking to buy commercial property is ACT conveyance duty, commonly known as stamp duty.
From 1 July 2026, the ACT commercial conveyance duty tax-free threshold increased to $2.1 million.
- $0 conveyance duty: Commercial property transactions with a dutiable value of $2.1 million or less attract no conveyance duty.
- Above the threshold: For commercial property transactions valued above $2.1 million, a flat rate of 5% applies to the total transaction value.
- Reduced upfront costs: For eligible purchases within the threshold, not having to fund conveyance duty can significantly reduce the amount of cash required to complete the purchase.
The applicable threshold and duty treatment depend on the transaction date and circumstances, so it’s important to check the current ACT Revenue Office requirements when considering a purchase.
How to build equity through commercial property ownership
Equity is broadly the difference between the value of your property and the amount you still owe against it.
As the principal of a commercial property loan is repaid, the owner’s equity in the property can increase. Changes in the property’s market value can also affect equity, although property values can rise or fall over time.
Owning commercial property may provide several longer-term opportunities:
- Building an asset: Principal repayments can gradually increase your ownership interest in the property.
- Potential capital growth: If the property’s value increases over time, this may further increase your equity.
- Future finance options: Depending on the circumstances and lender requirements, available equity in a commercial property may be used as security for future business borrowing, such as purchasing equipment, expanding operations or acquiring another property.
- A saleable asset: The property remains an asset that may be retained, leased or sold in the future as the needs of the business change.
Property ownership should still be considered as part of the business’s broader financial strategy rather than on the assumption that the property will automatically increase in value.
Key differences between commercial and residential loans
If you’ve only dealt with residential lending before, don’t assume getting a commercial property loan will work exactly the same way.
There are some important differences between commercial and home lending.
How the loan is assessed
Home loans: Assessment is generally more standardised and focuses heavily on your personal income, expenses, debts and ability to repay the loan.
Commercial property loans: The lender may look more broadly at the business, its financial performance and cash flow, the property being purchased, any rental income and how the proposed loan will be repaid.
The property matters more
Home loans: The security is generally a residential property, with lenders having established policies around the types of homes they’ll accept.
Commercial property loans: The type and use of the property can have a much greater influence on the lender’s assessment. An office, warehouse, retail premises, medical suite or specialised property may each be treated differently.
Deposits and loan-to-value ratios can vary
Commercial lending requirements can vary significantly between lenders and transactions.
The amount you can borrow may depend on the property type, location, intended use, strength of the borrower and the lender’s appetite for that type of commercial property. This means the deposit required can vary considerably rather than following one standard rule.
Loan terms and repayments can vary
Residential home loans commonly offer terms of up to 30 years.
Commercial loan terms and repayment structures can be different and may vary considerably depending on the lender, borrower, property and transaction.
Commercial loan pricing can be more individual
Commercial loan pricing may be assessed individually based on factors including the borrower, loan size, property, loan-to-value ratio and overall transaction.
This is one reason why comparing commercial finance isn’t simply a matter of looking for the lowest advertised interest rate.
Preparing for a commercial loan application
Commercial lenders can take a broader view of an application than residential lenders, so preparation can make the process much easier.
- Have your financials ready: Depending on the transaction, lenders may want to review business financial statements, tax returns, cash flow and other information to understand the financial position of the business.
- Understand the property: The lender will generally consider the type of property, its location, value, intended use and marketability as part of its assessment.
- Know your contribution: Understanding how much cash or equity you can contribute can help determine which lenders and loan structures may be available.
- Explain the purpose of the purchase: It can be helpful to demonstrate how owning the premises fits into the business’s longer-term plans and how the proposed loan will be serviced.
Different lenders can have very different appetites for commercial property, industries and loan structures. A transaction that doesn’t fit one lender’s criteria may fit another lender’s policies.
Using an SMSF to purchase business premises
For some business owners, purchasing qualifying business premises through a Self Managed Super Fund (SMSF) may be an option.
Under certain circumstances, an SMSF can purchase business real property and lease it to a related business. Strict superannuation, investment, borrowing and related-party rules apply, and transactions generally need to be conducted on commercial terms.
Where an SMSF needs to borrow to purchase the property, the finance is generally structured through a Limited Recourse Borrowing Arrangement (LRBA), which has additional requirements and restrictions.
SMSF property purchases can involve lending, superannuation, tax and legal considerations, so it’s important to obtain appropriate financial, tax and legal advice before proceeding.
Clarity can assist with the lending side of an SMSF commercial property purchase and work alongside your accountant, financial adviser and solicitor where required.
Considering buying your business premises?
Moving from renting to owning your premises can be a significant step for a Canberra business, but it isn’t simply a question of whether a mortgage repayment is cheaper than rent.
The right decision depends on your business’s cash flow, available capital, plans for the future, the property you’re considering and the finance available.
At Clarity Home Loans, our salaried brokers work together to understand your situation and compare commercial finance options from our lender panel. Our brokers don’t personally receive lender commissions, so the lender we recommend isn’t influenced by what that lender pays.
If you’re considering buying your business premises, start with a cost and obligation-free conversation with our team. We can help you understand how much you may be able to borrow, what a lender is likely to assess and what your finance options could look like.
Frequently asked questions
It depends on the strength of the business, the property being purchased, the deposit or equity available and the lender.
Commercial lending policies vary considerably, so it’s worth having your position assessed before committing to a property.
Not necessarily.
The maximum amount a lender will finance depends on the property type, borrower and lender policy. Some transactions may be possible with a smaller contribution, while others will require considerably more.
For transactions from 1 July 2026, commercial properties with a dutiable value of $2.1 million or less attract no ACT conveyance duty.
For properties valued above $2.1 million, a flat rate of 5% currently applies to the total transaction value.
Potentially. An SMSF may be able to purchase business real property and lease it to a related business, provided the property and arrangement meet the relevant superannuation rules and are conducted on commercial terms.
From a lending perspective, serviceability is one of the key considerations.
The lender will look at the rent your business will pay under the tenancy agreement, the strength of the business, the SMSF’s other income and contributions, its existing assets and expenses, and whether there is enough cash flow to comfortably meet the loan repayments and property costs.
The tenancy also needs to make sense commercially. Your business needs to be able to afford the market rent being paid to the SMSF, while the SMSF needs enough income and liquidity to manage its loan commitments and any potential shortfalls.
The structure, lease and SMSF itself should be reviewed by the appropriate financial, accounting and legal advisers before proceeding. Once that’s in place, your commercial broker can assess the lending side and determine which lenders may support the transaction.
Yes, and this is an important consideration before deciding how to own the property.
Commercial property held inside an SMSF must continue to comply with superannuation rules. If the SMSF has borrowed to purchase the property through a Limited Recourse Borrowing Arrangement, there can also be restrictions on what can be done to the property while the loan remains in place.
Repairs and maintenance are generally treated differently from significant improvements or developments. In particular, an SMSF generally cannot use borrowed money to make improvements that change the character of the original asset while an LRBA is in place.
This can become particularly important if you’re considering:
- substantially redeveloping the property
- changing its use
- major structural alterations
- subdividing or reconfiguring the asset
- developing unused land or additional space
- leasing parts of the premises to related parties.
This doesn’t necessarily mean those plans are impossible. It means the ownership structure needs to be considered before purchasing.
A property bought personally, through a company or trust may provide different flexibility from one held in an SMSF, but each structure also comes with its own tax, legal and asset-protection considerations.
If future development, additional tenancies or major changes to the property are part of your plan, raise them with your accountant, financial adviser and solicitor before committing to the SMSF structure. Your commercial broker can then make sure the proposed lending structure works alongside that advice.
Want to know what this means for you?
You don’t need to have everything figured out before you talk to us. Start with a cost and obligation-free chat with one of our brokers.
We’ll take the time to understand your situation, answer your questions and help you get a clearer picture of your options and what to do next.
