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Commercial buyer deciding sale basis · Western Sydney

Going Concern vs Vacant Possession Commercial Sydney

By the Mortgagefy Team · Published 19 Oct 2026 · Last reviewed 19 Oct 2026

The same commercial property can be sold two ways — with a sitting tenant (going concern) or empty (vacant possession). The sale basis changes GST, stamp duty, loan structure, LVR and the entire investment economics. Buyers often miss this until it's too late.

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General information only, not financial advice. Conditions apply.

How it works

Going concern: the business and property transfer together, with the tenant continuing. If ATO conditions are met, GST is nil (GST-free), which can also reduce the stamp duty base. The lender treats it as investment commercial, assessing tenant covenant.

Vacant possession: the property transfers empty. GST may apply (price often +10%), stamp duty on the GST-inclusive amount. The lender treats it as the buyer's own property — owner-occupier if you'll occupy, or investment if you'll tenant it after settlement.

The basis also changes loan LVR. Going concern with a strong tenant on a long lease often finances at 65-75% LVR as investment. Vacant possession for owner-occupation often finances at 70-80% because your business income supports it directly. Which is better depends on your situation.

What commercial lenders actually look at

Sale basis declared

Going concern vs vacant possession must be declared at contract. Changes GST, duty, loan structure.

Tenant covenant (going concern)

Lease length, rent, tenant financial strength, bank guarantee. Strong covenant = higher LVR.

Buyer intent (vacant possession)

Will you occupy or re-tenant? Drives owner-occupier vs investment loan structure.

GST registration

Buyer must usually be GST-registered for going-concern exemption.

Ways to hold the property

Structure sits between you, your accountant and your lender — tax, asset protection and succession all matter. Four common patterns we see with Western Sydney owner-occupiers:

Personal name

Simplest to arrange. Interest can be deductible against rental income. Little asset protection from a trading-business perspective.

Company

Common for long-term holdings inside a corporate group. Flat company tax rate on rent; no CGT discount at the company level.

Trust (discretionary or unit)

Flexible for distributing rental income and separating property from trading-business risk. Lenders are comfortable with clean trust documentation.

SMSF — leased back at market rent

An SMSF can borrow (via a Limited Recourse Borrowing Arrangement) to buy premises that meet the ATO's "business real property" test and lease them to your business at arm's-length market rent. High-level only — a licensed SMSF specialist and your accountant must confirm your situation.

This is general information only, not financial, tax or legal advice. Confirm your situation with a licensed credit adviser and accountant.

Who this suits

Owner-occupiers choosing between vacant purchase and buying out their landlord's lease
Investors evaluating tenanted commercial vs vacant stock
Buyers considering sale-and-leaseback structures
Multi-property investors planning portfolio moves
Businesses buying their own future premises from retiring landlords

Run your commercial numbers

Estimate repayments, LVR and deposit on a commercial purchase — owner-occupier or investment, full-doc or lease-doc — with our commercial property loan calculator. Paying rent now? Compare it against buying with the rent-vs-buy calculator.

Indicative only. Not a loan approval or borrowing-capacity assessment.

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Areas we cover across Western Sydney

Parramatta — Commercial strata offices and ground-floor retail around the CBD.

Bankstown — High-street retail, mixed-use shopfronts and professional suites.

Liverpool — Macquarie Street retail and small commercial around the hospital corridor.

Lakemba — Strata retail and food-service tenancies along Haldon Street and Railway Parade.

Hurstville — Forest Road retail and strata shopfronts near the station.

Cabramatta — Food precinct retail and small shopfronts along John Street.

Auburn — Mixed-use retail with strong food-service and specialty footprints.

Fairfield — Suburban high-street retail with on-street parking and bus-route traffic.

Check your commercial loan options

Answer a few quick questions about the property and your business. Free, no obligation, takes under 3 minutes.

Frequently asked questions

A current commercial enterprise transferring with the property, both parties GST-registered, enterprise continuing after sale. Lawyer and accountant confirm against ATO conditions.

Indirectly — if GST is nil, the dutiable value is the GST-free price, which can reduce the duty base vs a GST-included vacant possession price.

Usually yes — owner-occupier typically accesses 70-80% LVR. Investment going-concern with sitting tenant often 65-75%.

Yes — once the existing lease expires or is terminated. Lender may ask for your business plan if conversion from investment to owner-occupier is immediate.

Sale may lose going-concern status, triggering GST and higher duty base. Your contract should address this risk.

No — depends on buyer purpose, tax position and property use. The right basis is deal-specific.

Yes if the property qualifies as business real property and the SMSF either continues the existing lease or re-leases to a qualifying operating entity. High-level only.

Also see: Commercial refinance · Commercial cash-out refinance · Commercial equity release · Mechanic workshop

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General information only. Conditions apply. Mortgagefy is Credit Rep 532656 under ACL 348324.