Category: Commercial Property Management

Is There Stamp Duty When Buying a Commercial Property?

Stamp duty, or transfer duty as it is now known as in Western Australia, is a government tax that is payable on most property transactions.

When purchasing commercial or industrial property in WA, it’s important to understand what stamp duty is, what rate of duty will apply to a given transaction, and what it means for your circumstance.

What is Commercial Property?

A commercial property is simply a property which you intend to use for business purposes. Unlike residential, this is a broad category and includes everything from offices, warehouses and stores, as far as a residential dwelling that is used for commercial gain.

Industrial property is defined as a property that is used for the actual manufacturing of something, and can be considered either a factory or plant. In Western Australia, all commercial and industrial property transactions incur stamp duty tax, unless granted an exemption for unique circumstance.

What is Stamp Duty on Commercial Property?

Stamp duty is payable on most commercial property purchases when you buy land or property or have the ownership of land or property transferred to you.

In WA specifically, stamp duty is calculated on the market value of the property being purchased, rather than the purchase price. The amount you pay is calculated on a sliding scale, generally from 1% to 6% of the purchase price, although it can be higher, meaning the more expensive the asset is, the higher the transfer duty rate is that you will be required to pay.

Transfer duty extends past the commercial property and into certain business assets, but let’s start by looking at how stamp duty is defined, how it’s calculated, and any exemptions that might apply. 

Is Stamp Duty Always Payable When Buying a Commercial Property?

Whenever you purchase or acquire an interest in commercial property, you will be liable to pay stamp duty. There may also be a requirement to pay duty in other circumstances, such as if you lease a property, or even receive it through a trust or as a gift.

How Much is Stamp Duty on Commercial Property?

There are factors that should be considered when determining how much stamp duty you will need to pay. These include:

  • The ‘dutiable’ value or the price you paid or market value, whichever is higher
  • The intended use of the property
  • If you are a foreign purchaser
  • If the property is also your principal place of residence
  • Any exemptions or concessions you may be eligible for

General Rate of Stamp Duty

The general rate of transfer or stamp duty applies to commercial property, rural property that is used in isolation, and vacant land which doesn’t qualify for the residential rate. The general rate of duty is as follows:

  • <  $80,000 = $1.90 per $100 or part thereof
  • $80,001 – $100,000 = $1,520 + $2.85 per $100 or part thereof above $80,000
  • $100,001 – $250,000 = $2,090 + $3.80 per $100 or part thereof above $100,000
  • $250,001 – $500,000 = $7,790 = $4.75 per $100 or part thereof above $250,000
  • > $500,001 = $19,665 + $5.15 per $100 or part thereof above $500,000

More information on these rates is available on the WA government information and services website.

What are the Stamp Duty Exemptions for Commercial Property?

There are several circumstances where paying stamp duty may be avoided but they are typically considered as less-common circumstances.

Of the possible exemptions, spousal and family farm transactions can qualify for exemptions, however, both relate to the buying and selling parties being married or directly related. Charitable transactions can have stamp duty exemption, provided the transaction entered is or are for charitable or similar public purposes. One other reason for exemption is when the transaction involves purchasing from a state body, in this case, the State of Western Australia.

A concessional rate of duty is available for certain purchases of a business undertaking if the value of the dutiable property does not exceed $200,000. For more information on stamp duty rates and available concessions for commercial property, visit the Western Australian government information and services website, and the Duties Fact Sheets for Business Acquisitions and Residential Property.

Concessional Rate of Transfer Duty

A transaction may be assessed at the concessional rate of duty where:

  • the dutiable property is business property
  • the dutiable value of the dutiable property does not exceed $200,000 and
  • the purchaser is an eligible purchaser, being a person who is not a government body and who intends to carry on the business for an indefinite period.

The concessional rate of duty is as follows:

  • < $100,000 = $1.50 per $100 or part thereof
  • $100,001 – $200,000 = $1,500 + $4.39 per $100 or part thereof above $100,000

Calculating Stamp Duty for Commercial Property

The Western Australian government information and services website has a calculating tool which you can use to check how much stamp duty you will have to pay with commercial and industrial property purchases fall under the general rate type.

If you are purchasing more than one commercial property, the properties would be combined into one collective and for stamp duty to be calculated accurately, you will need the execution date and the total purchase price and value of the property.

As a privately owned West Australian company that specialises in the South-eastern corridor of Perth, Ross Scarfone Real Estate can assist you with all aspects of commercial and industrial sales, leasing, property management, valuations, investment, and development.

For specialist insight into the commercial real estate market, opportunities, or specific advice on indicative transfer duties, call or email Ross Scarfone Real Estate.

What is the GST on a commercial property purchase?

Purchasing a commercial property such as an office building, industrial or retail space is often more complex than buying a residential property.

The sale of each commercial property is a unique transaction and will often attract GST. Planning to factor in the GST (goods and services tax) into your budget is a wise move on your property investment journey.

In this article, we set out some of the key issues concerning GST when buying a commercial property.

What is the Goods and Services Tax (GST)?

The Australian Goods and Services Tax, commonly referred to as GST is a value-added tax of 10% on most goods and services.

GST is generally required where a seller is registered or required to be registered for GST and operating as an “enterprise”.

Do You Need to Pay GST on Commercial Property?

When purchasing a commercial property, you will be classified as an enterprise and once your turnover (as an investor or developer) is above $75,000 you are liable to pay GST, which is likely to be included in the final property price.

In rare circumstances when a property is part of a GST-free ‘supply of a going concern’ then GST does not apply. This might be applicable if the property belongs to one of the categories outlined below:

  • Business premises (assets and the operating structure of the business must be sold together with the property)
  • A fully tenanted building (all leases, agreements and covenants must be included in the sale)
  • A partially tenanted building (the vacant part of the building must either be actively marketed for lease or undergoing renovation).

GST does not apply to the sale price of residential properties that are not new but applies to the sale of newly developed residential land by developers who are registered or need to be registered for GST.

Aside from paying GST on the sale of commercial property, GST applies to most expenses associated with owning and managing an investment property (such as repairs and maintenance, management, and marketing fees) unless the acquisition of the goods or services is from an unregistered entity.

Can You Claim GST Credits on Commercial Property Purchase?

If you are a commercial buyer and registered for GST, you are most likely entitled to claim GST credits.

To be eligible for GST credits the following requirements will need to be met:

  • GST must have been paid at settlement
  • Both the buyer and vendor must be GST registered
  • The property must be used in carrying on an enterprise
  • Tax deductions must be lodged within four years
  • The property cannot be part of a GST-free ‘supply of a going concern’ or sold using the margin scheme

How Does GST Affect Buyers and Sellers of Commercial Properties?

It is commonly required that commercial property investors apply for an Australian Business Number (ABN) and register for GST with the tax office.

If it does not happen, they are likely to have to pay GST on any sale they have made since the time they were required to register.

For example, assuming a seller sold a property for $1,000,000 with no GST, but should have been registered, they will still have to pay the GST!

However, had they registered for GST prior to the sale, they would have sold the property for a GST-inclusive price of $1,100,000. You as a buyer will pay the GST upfront but then you can claim it back. The seller then pays their GST liability of $100,000 and takes home their $1,000,000 net.

If you are eligible, you may be able to use the margin scheme to work out the GST (note: if you go down this route, you will not be able to claim the GST credits).

According to Commercial Real Estate, this scheme is most often applied for land that will ultimately be used for residential purposes. Under the scheme, the 10 percent of GST payable is typically only calculated on the sales margin – that is, the sale price less the amount the property was bought for.

It is worth noting, that commercial property sellers should be clear about whether GST is included in the price when advertising the property. Also, once you have collected the GST, you should submit it to the ATO in your Business Activity Statement (BAS) or via another reporting method.

Failing to register and pay GST when applicable may also attract a penalty from the ATO.

Get Help with GST on Commercial Property in Perth

Purchasing a commercial property is a big investment decision with significant financial implications for both the seller and buyer.

Whether or not you are required to pay GST on the sale price of the property can be difficult to comprehend, but by doing your research and getting the right help, you will not miss out on claiming valuable GST credits, or neglect to pay GST when you are liable.

A good lawyer and the Australian Taxation Office (ATO) can help you understand your contract of sale and GST on commercial property purchases. It is also a good idea to look at some of the online GST calculator tools to calculate the exact amount of GST you will pay or should charge. 

For a piece of specific advice on commercial property for sale in Perth, contact Ross Scarfone Real Estate. Our agents specialise in industrial and commercial real estate in Perth’s southeast corridor including Belmont, Welshpool, Kewdale, Victoria Park and surrounding areas.

How to Save Money Leasing a Commercial Property in Perth

Are you considering leasing a commercial property in Perth? Starting up a new business or moving your existing company to a new location can be expensive.


Leasing a warehouse or industrial space requires serious consideration. Depending on the amount of space you need and the services you want to employ, there are several factors to consider before you sign on the dotted line.


Here are 6 tips to help you save money when leasing a commercial property.

Pay For Space According to How You Use it


The first step is to ensure you are paying for your warehouse space according to how you are using it. A simple determination of measurement can create an opportunity for saving money on a commercial lease. Determine how much of horizontal and vertical space will be utilised.


For example, will you be utilising a floor space only or do you need additional space to stack up your goods up to the ceiling? If so, make sure that there are no structural blockades like steel beams preventing you from arranging your products. If you have identified structural constraints do not pay for space you will not be using, talk to your landlord and save money on renting a warehouse.

Exclude Some Maintenance Costs


Maintenance costs are necessary costs for upkeep when renting a commercial property. Tenants are obliged to keep the property in good working condition but that does not mean you should pay all the costs. To save you money in the long term determine the following:

  • Who is responsible for performing and paying for fit outs and repairs?
  • Who is responsible for replacing equipment attached to the warehouse?
  • Would I be required to install signs?
  • Is the landlord willing to pay for future warehouse alterations and improvements?

The answers to these questions are important to know early because you do not want to discover you are responsible for such expenses after signing the contract. When negotiating your lease, it is recommended you include HVAC maintenance and servicing as a maintenance cost that you are responsible for any major repairs and alterations as the landlord’s responsibility. Learn more about the outgoings on commercial rental property.

Warehouse shelves

Optimise Use of Space


The importance of an efficient and safe workspace cannot be overstated. You can maximise the performance of your space utilising smart fit outs. Do not start with the racking, start with a plan for optimal flow of goods through your warehouse space. The most common fit outs to optimise your space include:

  • Walls and Partitioning
  • Lighting
  • Mezzanine Floors
  • Floor Coverings
  • Line marking
  • Shelving and Storage
  • Pallet Storage Solutions
  • Warehouse Equipment

Is your warehouse perfectly optimised already? Consider subleasing part of your property to a third party. This can be a good idea if you have more space, as it allows extra cash flow to help with the rent.

We’ve also put together a list of easy to understand tips that will help you be better informed when looking at Perth warehouses to lease and put you in a better position to negotiate the price of your rent.

Research Surrounding Properties


In an ideal world, your first lead is the right fit for your commercial space requirements. However, this is rarely the case. Review all surrounding similar properties and be aware of what they are charging per usable space. This will help you negotiate the rates for your space accordingly and give you an idea of how much room you have to haggle.


You could also introduce yourself to the commercial agents in the area and have them alert you to new properties on the market. If you can bid before anyone else, you might be able to get the price you want.

Review Your Contract Carefully

A commercial lease contract is a legally binding agreement. It is a technical document that can be difficult to understand.

Before you sign a contract, learn how to negotiate a commercial lease to get what you want and know what you’re committing to.

Your commercial lease agreement will contain a process for changing the rent, usually every year. Rent reviews are standard practice for commercial leases and could be an opportunity to save you money too. For example, you may choose to commit to a longer lease agreement and therefore be able to negotiate a lower rent.

Consult a Commercial Property Expert

If you’re still not sure how to save money on renting a commercial property, speak to the local commercial real estate experts at Ross Scarfone Real Estate. We specialise in commercial and industrial buildings for lease in Perth’s south-east corridor of Belmont, Welshpool, Kewdale and surrounds. You can view our entire list of properties to lease and request a tour of the available commercial rental properties in the area.

Contact us for your commercial real estate needs

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