Practice premises loans: buying the building your clinic operates from

Every clinic owner who’s been through a difficult lease renewal has wondered whether they should just buy the building. Owning your premises means no landlord deciding your future, no make-good at the end of a lease and a fit-out that stays yours. It also means a larger loan, stamp duty, maintenance and a big chunk of capital tied up in property. For many health businesses it’s still the right move. Here’s how practice premises loans usually work.

Why do practices buy their premises?

• Security of tenure. A clinic can’t easily move patients, equipment and referral relationships. Owning removes that risk.
• Protecting the fit-out. A significant fit-out in leased premises is only as secure as the lease.
• Control. You decide on works, signage, hours and future expansion.
• Long-term wealth. Rent paid to yourself, often through a separate entity, instead of a landlord.

business.gov.au’s guide to choosing a business location compares leasing and buying, including upfront costs, flexibility and maintenance responsibilities.

What kinds of premises can be funded?

Property type	Notes
Strata medical suite	Common in medical centres and precincts; check by-laws and permitted use
Freestanding clinic	Converted house or purpose-built building; zoning and parking matter
Retail shopfront	Common for pharmacies, dental and allied health
Childcare centre	Purpose-built, with specific planning and regulatory requirements
Mixed-use building	Practice on the ground floor, other tenants above

How is a premises purchase usually financed?

Most premises purchases are funded with a commercial property loan or a property-secured business loan from $20,000 to $5,000,000. The loan is secured over the premises being bought and, where needed, other residential or commercial property. Using equity in another property can reduce the cash deposit required.

Lenders will assess:

1. The property. Location, type, condition, zoning and how easily it could be sold or leased to another tenant.
2. Serviceability. Whether the practice, or the entity that owns the property and collects rent from the practice, can meet repayments.
3. Your equity. Deposit, other property and overall position.
4. The lease between your entities, if the property is held separately.

A patchy credit history or a tax debt is looked at in context rather than dismissed.

If you’ve found a property or you’re thinking about making an offer, start a short enquiry to see what’s realistic before you commit.

What costs sit on top of the price?

• Stamp duty. Each state sets its own duty on property purchases. Revenue NSW and the State Revenue Office Victoria both publish calculators and rules on their websites; other states have their own. Duty can be significant, so work it out early.
• Legal and conveyancing fees.
• Valuation and inspections, including building and pest.
• Fit-out changes, if the property needs work to suit your practice.
• Holding costs if there’s a gap between settlement and moving in, such as rates, insurance and strata levies.

Who should own the property?

Many practice owners hold property in a separate entity, such as a family trust, company or self-managed super fund, which then leases it to the practice at market rent. The choice affects tax, asset protection, lending options and how the property is treated if the practice is ever sold. This isn’t a decision to make on the fly. Speak to your accountant and lawyer before you sign a contract, because the buying entity needs to be settled before exchange.

An illustrative example

Illustrative only. A dental practice has leased a shopfront for ten years and invested heavily in its fit-out. The landlord offers to sell. The owners set up a separate entity to buy the property and lease it to the practice. They use equity in their home plus the property itself as security, so the cash needed is limited to stamp duty and costs. The practice keeps paying rent, now to an entity the owners control.

Buying a practice and premises together?

If the sale of a practice includes its building, the two parts are often funded separately so each is assessed on its own merits. See finance to buy a medical practice for the business side.

What if you’d rather keep leasing?

Buying isn’t right for everyone. Leasing keeps capital free for equipment, staff and growth, and makes it easier to move if the area changes or the practice outgrows the space. If you’re staying put, the key is a lease that protects your investment: a long term with options, fair rent reviews, reasonable make-good terms and a clear position on who pays for base building works. If you’re fitting out leased premises, see clinic fit-out finance. If the second site is the bigger question, read opening a second clinic.

Checks before you make an offer

• Confirm the zoning and permitted use allow your type of practice.
• Check parking, accessibility and signage rights.
• For strata suites, read the by-laws and recent owners corporation minutes.
• Get a building inspection, especially for older buildings.
• Work out stamp duty and costs using your state revenue office’s calculator.
• Ask your accountant which entity should buy, before you sign anything.

See if your premises purchase could qualify

Owning your clinic’s building is a long-term decision. Asking whether it’s possible takes about 60 seconds, with no credit check involved. We don’t send your details out to a stack of lenders. A person who understands both practice finance and commercial property will call you to go through it.

Please be accurate on the form, including the purchase price, your state and any other property you own, so we can match you with the right option first time.

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