Tag: Perth Commercial Real Estate

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.

Residential vs Commercial Property Investments – What’s The Difference?

Whether you’re new to property investment or you’ve invested in residential properties in the past and are now ready to buy a commercial property, this guide will give you an overview of the differences between the two types of investments.

What is a commercial property?

A commercial property, or commercial real estate, is a piece of land or building that is used for activities that generate profit, rather than residential purposes.

What are the benefits of buying a commercial property?

It’s often said that residential property investments come with fewer risks. While that might be true in some instances, there are plenty of reasons for investors to choose to buy a commercial property:

Higher rental yields

The rental yield is the profit you make from the property, it’s the difference between your costs and the income (rent) that the property generates.

Rental yield for commercial properties is higher than residential properties. Overall, rental yield is one of the main aspects of a property that you should consider when comparing commercial properties for sale.

Bigger cashflow

 Because of higher rental yields, commercial properties are more likely to be cash-flow positive than their residential counterparts. Moreover, commercial properties can count on fixed annual rent increases, as discussed further down this guide.

Long-term tenants

Commercial leases are on average much longer than residential ones. That’s because finding a tenant for commercial properties is more time-consuming than finding a new tenant for a house or apartment.

Tenants that care

Because commercial properties are used to host and run businesses, tenants tend to give great care to the upkeep of thr property.

Low maintenance costs

Tenants often sign “net” commercial leases, meaning that they commit to taking on any strata fees, maintenance and repairs costs, and other property outgoings. This is unusual for residential properties, but it’s the norm in the world of commercial properties.

Locked-in rent increases

One of the great benefits of buying a commercial property is that commercial leases often include locked-in annual rental increases (between 3-4%). If the percentage of increase is higher than the current level of inflation, your annual gain will be significant.  

How to buy a commercial property?

Unlike residential properties, buying a commercial property requires more business acumen and due diligence. Here’s why:

Economic earthquakes

Commercial properties are subject to changes in the economic landscape. Sudden changes in the economy, for example, might cause your property to be vacant for a longer prior of time

Finances

To purchase a commercial property, you need to apply for a business loan – which is different from a normal home loan. They require a higher deposit, usually around 30%, and interest rates and fees are higher.

On average if you’re investing in commercial property, you need deeper pockets than the average residential investor. 

However, commercial investments come in all shapes, sizes… and prices. Multimillion-dollar investments might be out of reach for most, but there is plenty of more accessible options such as office spaces for $400,000 or parking lots for $100,000! 

Property Value

It’s often said that commercial properties have a lower capital growth than rental investments. Many agree to disagree on this topic, but it’s definitely something you should keep in mind if you’re interested in learning more about how to buy a commercial property.  

The value for residential properties is linked to potential for capital growth, because they have a high potential, and because rental yields are not as important when owner-occupier buyers and investors are interested in the same property.

For commercial properties, the value is calculated based on the ROI from the tenanted property. If you’re companies commercial properties in Perth, start by calculating the rental yield and comparing them.

Interested in buying a commercial property in Perth?

Read our 8-pages guide to commercial real estate investment or contact Ross Scarfone today. 

Perth Commercial Property Outlook 2021

Perth Commercial Property Report for 2021

There’s no doubt that the uncertainty of 2020 left its mark on the commercial property market across the country. We were lucky here in Perth, where the health effects of the pandemic were barely a blip and hard borders kept our state’s economy ticking over. And while our minimal lockdowns affected retail strips, commercial and industrial businesses were often considered essential and able to keep operating.

While some Australian cities saw industrial and commercial real estate transactions drop during the COVID-19 period, Perth’s were up 10.70 per cent, with $828.69 million in industrial property transactions.

All this leads to good news for the Perth commercial property market.

With the rest of Australia now recovering well from the COVID recession, interest rates low, and both state and federal governments investing in stimulus packages, it’s a perfect time to look into the future with our 2021 commercial real estate report 2021.  Here are our 5 big takeaways for this post-pandemic year.

Commercial Real Estate Prices 2021

While 2020 saw small drops in median prices across much of Perth, things are stabilising. Thanks to a long period of low-interest rates, there’s no shortage of money. And as far as investors are concerned, commercial property offers secure long-term income with better yields than bonds. This means we are seeing a lot of investment interest in commercial property and values are holding steady. We expect them to remain stable in the near future, and start increasing over the next 12 months as stock levels are low and the demand remains strong.

Commercial Property Vacancy Rates in 2021

The vacancy rate for commercial and industrial real estate in Perth is low. And with strong demand and low stock, it will decrease even more.


For investors, this means more security and better yields because you are less likely to face lengthy periods with no tenant. And if you can get a new tenant quickly, you will be getting the return on your investment, rather than paying interest on a loan for which you are getting no income. As far as rental returns go, rents have been stable for a while, and we don’t expect big rent hikes. However, low interest rates mean more rent in your pocket, not the banks.

Commercial Real Estate Demand in 2021

We’re seeing strong demand for commercial and industrial real estate in Perth. And stock levels are dropping. We’ve recently received multiple offers on a single property more than once. Strong demand and limited supply tend to lead to price increases over time. This makes commercial and industrial real estate a sound investment option.

Sellers’ Market

For the past few years, the Perth commercial property market has been a buyers’ market. We are at an interesting stage now where we are seeing good demand from buyers and stock levels reducing. We’re watching the market shift to a sellers’ market. But what does this mean in practice?

In a buyers’ market, there are more commercial and industrial properties on the market than there are buyers for those properties. This puts downward pressure on prices to shift stock that may otherwise stay on the market for a while. Although a buyers’ market makes commercial property more affordable, it may also indicate lower growth over the short term. Unless the market improves – which is what is happening in Perth right now.

When there is more demand than supply, properties sell more quickly and at a good price. There is less likely to be negotiating on prices because sellers have the power.

Properties may also sell the list price as buyers compete with each other to secure an investment property.

Perth is currently in that sweet spot between buyers’ and sellers’ market – the perfect time to invest.

It’s also not uncommon for properties to sell above their list price in a seller’s market as buyers compete for the hottest commodities.

Hot Commercial Real Estate Suburbs in 2021

When you think about where to buy your next investment property, you want to have a look at the supply and demand of property in the suburb or area you’re interested in. As specialists in outer-suburban commercial and industrial real estate in Perth’s South East, we get a good idea of the hot suburbs to invest in. We continue to see good demand for the industrial properties both in Welshpool and Kewdale, as well as for smaller properties in surrounding suburbs such as Carlisle, East Victoria Park and Cannington. These suburbs are all easily accessible to Perth airport, freight rail line and major freeways.

Great time to invest in an industrial property 

As you can see from our predictions above, 2021 is shaping up to be an ideal time to invest in Perth industrial and commercial properties. If you are thinking about a warehouse, in particular, there are a couple of facts you should know:

  • According to the latest report from the Real Estate Institute of WA, the most affordable Perth regions to buy a warehouse are Perth’s North East and South East, with the lowest cost per square metre.
  • The South East accounted for 20 per cent of total warehouse sales across Perth in 2020.

For a detailed breakdown of the Perth commercial real estate market or specific advice on warehouses for sale in Perth, call or email Ross Scarfone Real Estate. Our agents specialise in industrial and commercial real estate in Perth’s southeast corridor including BelmontWelshpoolKewdaleVictoria Park and surrounding areas.

We would love to help you build your portfolio, contact us today.

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Guide to Commercial Real Estate Investment

Thinking about to invest in commercial real estate in Perth?

Before you do, read this 8-page commercial real estate commercial property investment guide.

Keen to invest in commercial real estate – without risking everything?

Commercial property investment can be a risky business, but there are ways to minimise this risk by investing in cost-effective facilities.

If you buy the right commercial property, in the right location, at the right price, you will reap far greater rewards than residential investments. The figures don’t lie:

  • 1-2% residential gross rental yield
  • 6-8% commercial real estate rental yield

Why You Need This Guide

Not only does this guide detail what you need to consider when investing in a commercial property, but it also outlines the different types of commercial real estate investment you might be considering.

This guide is a must-read for anyone looking to invest in commercial real estate in Perth.

Download Commercial Investor Guide

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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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Find Your Perfect Commercial Real Estate Agent

When it comes to choosing a commercial real estate agent, it’s important to find one who will be able to help you reach your goals, whether that includes selling, leasing, buying, investing, or developing.

Navigating these complexities can be overwhelming. Although, it doesn’t have to be if you find the right agent to support you. The right agent should understand your business needs, their local area, and be highly experienced and well-connected. They should have an exceptional portfolio of clients and properties.

Your agent should also ensure they develop a positive relationship with you, as you should have a good customer experience throughout your property journey.


They Should Know Their Local Area

When choosing a commercial real estate agent in Perth, it’s important to find an expert in your location of interest.

In terms of industrial real estate, there are four main quadrants within Perth:

  • South East Perth – includes Belmont, Canning Vale, Forrestdale, Kewdale, Maddington & Welshpool.
  • North West Perth – includes Balcatta, Joondalup, Landsdale, Wangara & Yanchep.
  • North East Perth – includes Bassendean, Bayswater, Bellevue, Malaga, Midvale, Morley & Osborne Park.
  • South West Perth – includes Bibra Lake, Cockburn Central, Jandakot, Naval Base, O’Connor, Port Kennedy & Rockingham.

If you want to rent or purchase a commercial property, it’s important to choose an area that has the infrastructure, arterial roads, and zoning that best suits your business’ needs. From there, you should find a real estate agent who is an expert in your desired location.

Within the South East Perth quadrant, Ross Scarfone Real Estate are experts in the commercial and industrial real estate sector. They have over 30 years of proven experience.


Find an Agent Who Understands Your Business

A good commercial real estate agent should have a niche that they really understand. When you are meeting with a potential agent, you need to find out whether they are a good fit to work with your business. You need to know that they really understand your requirements.

This means that if you are looking to rent, the commercial leasing agent should recognise your customer profile, and understand your day-to-day operations, turnover estimates, and the equipment and human resources that your business requires. They should also try to gain insight into what your future business plans are, so they are aware of how they might affect your requirements in terms of space, facilities, or the length and terms of the contract.

Your commercial real estate agent should be able to guide you to consider all necessary details about a new office, storage or warehouse space before you even really start looking, let alone commit.

In understanding your business, they should be able to scout for suitable properties within a specific location and present them to you, reducing your stress and giving you more time to focus on your business.

If you are looking to buy, sell or to lease your property, the real estate agent should also understand your business and financial needs.


Choose an Experienced Commercial Real Estate Agent

An experienced commercial real estate agent is essential when it comes to finding the perfect property with the right contract in place.

They should have a transparent portfolio of properties and clients that align with your business requirements. You need to ensure they have successfully looked after similar clients in the past, that have been of a similar size, complexity, and type to yours. While you are researching this, ensure they have a good reputation and that their previous clients would recommend them.

Your agent should also have an in-depth understanding of selling, renting, leasing, or buying a property from start to finish, so they can advise you on that process. This means they will be able to walk you through the documents and other information you will need to have.


A Well-Connected Real Estate Agent Is the Key to Your Success

Your commercial real estate agent should not only understand your business, have proven experience, and be an expert in property in your local area — they should also be well-connected.

This means they should have both local market awareness, and the ability to assist you if you need to relocate or expand in a different area. For example, if you are looking to do business interstate or overseas, they should be able to utilise their connections to ensure you have a smooth transition.

They should also have contacts to key personnel across the property sector, including financial institutions, solicitors, and surveyors. By utilising these connections, they should be able to guide you through every step of the leasing process by referring you on as necessary.

Ensure Your Commercial Real Estate Agent Communicates Well

Your commercial real estate agent should be available to you via phone, mobile and email, both inside and outside office hours (within reason). They should be able to communicate openly and honestly about all matters regarding your business premises and get all key information across to you succinctly.

It’s important you are able to understand what the agent is trying to communicate, so misunderstandings don’t arise —you need to know exactly what is in the contract and what you are getting as part of the deal.

If you need a commercial and industrial real estate agent or property manager in Perth, Ross Scarfone Real Estate has extensive experience and knowledge of the property market in the South East Perth region. They have been helping businesses thrive for over 30 years by leasing commercial real estate, including small offices, storage yards, and industrial warehouses, in an ethical and professional manner.

Ross Scarfone Real Estate - Commercial Property Agent Perth

Contact us for your commercial real estate needs

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