Commercial
Commercial property
Offices, shops, industrial sites and specialised assets are financed differently from homes. Lenders look closely at the income, the leases and the asset itself.
How lenders look at commercial property
A commercial lender is usually most interested in whether the property’s income can carry the loan. It tests net operating income against interest (the interest cover ratio) and against interest plus principal (the debt service cover ratio). It also looks at how long the leases have to run, often summarised as the weighted average lease expiry, and at the quality of the tenants.
Valuation is usually income-based, so a vacancy or a lease ending during the loan term can affect both the value and the amount a lender will advance. Specialised assets, such as hotels, childcare centres or service stations, are often valued partly on the business that operates from them.
Duty and tax differences
Transfer duty on commercial property is set by each state and territory, and the treatment of commercial land can differ from residential land. GST can also apply to commercial sales unless the sale qualifies as the supply of a going concern.
- New South WalesNot yet verified by Privet. Revenue NSW
- VictoriaVictoria's commercial and industrial property tax reform may change how duty applies to commercial and industrial land. Check the State Revenue Office before relying on this estimate. State Revenue Office Victoria
- QueenslandQueensland publishes these rates as applying to commercial and investment property. Queensland Revenue Office
- Western AustraliaThe general rate applies to dutiable transactions unless the Duties Act provides otherwise. WA Department of Finance
- South AustraliaRevenueSA has changed how qualifying and residential land is treated. Commercial treatment is being reviewed against RevenueSA guidance before Privet estimates it. RevenueSA
- TasmaniaGeneral rates are used for commercial property in Privet's estimate. State Revenue Office of Tasmania
- Australian Capital TerritoryNot yet verified by Privet. ACT Revenue Office
- Northern TerritoryNot yet verified by Privet. NT Government
See the open data page for the schedules Privet uses, with sources.