Can you get a loan for a car space? Why most lenders refuse one on its own, three ways buyers fund it anyway, and how a whole car park is financed.
Property Lending Hub
Car Park Finance · Car Space Loans · Security
Most lenders will not take a car space on its own as security. This insight covers why, how business owners and investors fund a space anyway, what changes when you buy a whole car park, and what to check before you sign.
Quick Answer
Most lenders will not take a car space on its own as security, so buyers usually fund one in one of three ways. They add it to the home or premises loan, release equity from property they already own, or use short-term private lending with a planned exit. A block of spaces or a whole car park is a different deal: it is assessed as a commercial property loan, on the lease or the trading income.
Also called: car space loan, parking space finance. A car space loan is for one bay; car park finance also covers whole parking stations and blocks of spaces.
Can you get a loan for a car space on its own?
You can get a loan for a car space on its own, but only from a narrow group of lenders, and most mainstream lenders will decline it. The common line that you cannot get a loan for a car space is close to right at the big end of the market and wrong across the whole of it. What decides the answer is the title, the location and the size of the security, not the fact that it is a car space.
Take a car space on its own title, in a strata scheme where anyone can buy it, in a city centre where spaces trade regularly. That is a security some non-bank and specialist lenders will consider. A space that only exists as part of an apartment or office lot is a different thing: no lender will finance it separately, because it cannot be sold separately. Most of what buyers see on listings sits somewhere between those two.
For business owners the question usually comes up in one of two ways. The first is a space or two near the premises for staff or a work vehicle, which is mostly a security problem. The second is a block of spaces or a whole car park bought for income. That is a commercial property loan with an unusual tenant, and it follows the rules set out in how commercial property loans work.
Why do many lenders refuse a stand-alone car space?
Many lenders refuse a stand-alone car space because it falls below most lenders' minimum security size (varies by lender), it is hard to value, and it can be slow to sell if the loan goes bad. Each of those is a credit reason, not a judgement about the buyer.
- The security is small. Most lenders set a minimum property value or size below which they will not take a mortgage. A single car space usually sits under that line, so the application stops before anyone looks at your income.
- The valuer has little to work with. Car spaces trade less often than units or shops, and sales in the same building can be years apart. Thin sales evidence leads to a cautious valuation, and the lender lends against that figure. Our guide to what commercial valuers test explains how this flows through.
- The buyer pool can be tiny. If the by-laws or the title limit sales to owners in the same building, a lender selling the space after a default has a handful of possible buyers, not a market.
- The income is small or absent. A space you use yourself earns nothing, and a leased space earns a modest rent. There is little to service the loan from the security itself.
To a credit team, a car space looks like specialised security: a narrow use, a narrow market and a value that can move further than the property around it. Lenders that do take one alone usually set a lower loan to value ratio than they would on a standard unit or shop. The exact settings vary by lender and by location.
How do buyers fund a car space when a lender will not take it alone?
When a lender will not take a car space alone, buyers usually fund it by attaching it to a bigger security, borrowing against equity they already hold, or using a short private loan with a clear exit. The right route depends on what else you own and how long you need the money.
- Add it to the home or premises loan. If you already have a loan over your home or business premises, many lenders will take the car space as extra security alongside it. The lender values both properties together, so the small security sits behind the larger one. For owners buying a space in their own building, this is usually the simplest route.
- Release equity from property you own. An equity release or top-up against a property with spare equity funds the purchase, and the car space is bought without its own mortgage. For business premises, see commercial property equity release.
- Use a second mortgage. Where the first lender will not increase the loan, a second mortgage over the main property can fund the space, typically at a higher cost than the first loan and for a shorter term.
- Use a private lender for a short term. A private lender can fund a space on its own or settle quickly, as long as the exit is planned from the start, such as a refinance into the main loan or a later sale.
| What you are buying | Typical lender response | The usual workaround |
|---|---|---|
| A single space on its own title | Some non-bank and specialist lenders will consider it; most major banks decline it as sole security. | Add it to an existing home or premises loan, or fund it from equity. |
| An accessory lot | No lender takes it separately, because it cannot be sold apart from its main lot. | It is financed as part of the main lot's loan, or not at all. |
| A strata block of spaces | More lenders will look at it, because the total value is larger and the spaces can be sold one by one. | A commercial property loan over the block, usually at a lower LVR than a standard shop (varies by lender). |
| A whole car park | Treated as commercial property; the lender reads the lease or the operating income. | A commercial property loan, or private funding while the income history builds. |
How do you finance a whole commercial car park or a block of spaces?
A whole commercial car park or a block of spaces is usually financed as a commercial property loan, with the lender reading the lease or the trading income rather than counting bays. How the income is earned decides most of the terms.
What if a parking operator leases the car park?
A car park leased to a parking operator is assessed much like a shop or office with a tenant. The lender looks at the lease term left, the rent review clauses, the strength of the operator and whether the rent covers the loan with room to spare. Our post on the lease doc commercial property loan covers how lenders use a lease in place of tax returns.
What if you run the car park yourself?
An owner-operated car park is closer to a business than a building. The lender wants trading history: ticket and permit income, operating costs, and how steady the takings are across the year. With a short history, lenders tend to lend less against it or price it higher, and some deals only fit private lending until there are accounts to show.
Parking inside a larger building, such as the basement levels of a mixed-use property, is often easier to finance than a stand-alone parking station, because the lender can see a wider pool of buyers for the building as a whole. Expect the deposit to sit at the cautious end of the commercial range; our commercial property loan deposit post explains what moves it.
What strata and title issues affect financing a car space?
The title is the first thing that decides whether a car space can be financed: a separate lot can be sold and mortgaged on its own, while other spaces are tied to another lot or are not titled at all. Check the title before you check the price.
- A separate lot. A car space on its own title, usually a strata lot, can be sold to anyone the by-laws allow and can carry its own mortgage. This is the only kind a lender can take as sole security.
- An accessory lot. In some states and schemes the space is an accessory lot attached to an apartment or office, and it cannot be sold to an outsider. It can only be mortgaged as part of the main lot.
- Exclusive use of common property. Some spaces are not lots at all. The owner has a right, granted by by-law, to use part of the common property. There is nothing to mortgage separately, and the right goes with the lot it is attached to.
- A licence or lease. A space held on a licence or a long lease from the building owner is a contract right rather than property, and lenders treat it that way.
By-laws matter as much as the title. Some schemes limit car space sales to owners or occupiers in the building, which shrinks the market and the lender's appetite with it. If you are buying a space with a strata office or shop, the checks in buying a strata office or shop apply to both, and practices buying in a strata block can follow the strata medical suite checks.
What does it cost to own car parking in Sydney, Melbourne and Perth?
Owning car parking costs more than the purchase price: strata levies, council rates and land tax can all apply, and parts of Sydney, Melbourne and Perth add a separate parking levy. The lender's valuer, and the next buyer after you, will price these holding costs in too.
- Sydney. The NSW parking space levy is an annual levy on off-street parking spaces in Category 1 districts (Sydney CBD and North Sydney) and Category 2 districts (Bondi Junction, Chatswood, Parramatta and St Leonards). An owner holding a space on 1 July may need to lodge an annual return by 1 September. A buyer's liability starts from the 1 July after purchase, the levy is not reduced for part-year ownership, and an unpaid levy stays with the owner who incurred it. Rates are gazetted around 30 June each year and indexed, and some residential spaces are excluded, according to Revenue NSW, What is parking space levy (last updated 27 October 2026, read 4 November 2026).
- Melbourne. Victoria charges a congestion levy on non-residential parking spaces in defined inner Melbourne areas, administered by the State Revenue Office.
- Perth. A parking levy applies to non-residential parking bays in the Perth city area.
- Everywhere. Strata levies, council rates and, depending on the state and your other holdings, land tax. A space that is cheap to buy can still be costly to hold.
Levy rates change each year, so this post does not state them. Check the current rate with the relevant revenue office before you sign and again before settlement, and allow for it when a lender tests whether the income covers the loan and the holding costs.
What should you check before you buy a car space?
Before you buy a car space, check the title, the by-laws, the holding costs and whether your lender will take it, in that order, and get the lender's answer before you sign. What lenders actually look at first is the title, so start there.
- Confirm the title type. Separate lot, accessory lot, exclusive use right or licence. Your conveyancer can confirm it from the title search and the strata plan.
- Read the by-laws. Look for limits on who can buy, lease or use the space, and any rules on vehicle size, charging points or storage.
- Price the holding costs. Get the strata levies, council rates and any parking levy in writing, and ask your accountant about land tax.
- Ask the lender question early. Before you sign, ask your broker whether your current lender will add the space to the home or premises loan, or whether you need equity, a second mortgage or a private loan.
- For a whole car park, gather the income evidence. The lease and operator details, or the trading figures if you run it, plus any building condition reports.
- Plan the exit if you use private funds. Know which loan will refinance it, or when you would sell, before the private loan settles.
If you are comparing which lenders look at unusual security, the non-bank lender policy matrix shows how policy differs, and the Property Lending Hub collects the related guides.
A car space can be financed, but rarely on its own. A single space usually sits below most lenders' minimum security size, so most buyers add it to the home or premises loan, fund it from equity, or use a short private loan with a planned exit. A block of spaces or a whole car park is a commercial property loan, assessed on the lease or the trading income, and the title and levies shape every version of the deal.
Key takeaway: check the title and get your lender's answer before you sign the contract for a car space.Frequently Asked Questions
The LVR lenders allow on a car space is usually lower than on a standard unit or shop, where they will take the space at all. Lenders that accept a car space as sole security tend to set a conservative loan to value ratio because sales evidence is thin and the buyer pool is small. When the space is added to a home or premises loan, the lender looks at the combined security instead, and the settings vary by lender.
Whether you can buy a car space without owning an apartment in the building depends on the title and the by-laws. A separate strata lot can usually be sold to an outsider unless the by-laws limit sales to owners or occupiers, while an accessory lot or an exclusive use right cannot be bought on its own. Your conveyancer can confirm which applies, and buying a strata office or shop covers the strata documents worth reading.
Whether you pay the parking space levy on a car space depends on where the space is and how it is used. In NSW the levy applies to off-street spaces in the Category 1 and Category 2 districts, owners holding a space on 1 July may need to lodge an annual return, and some residential spaces are excluded, according to Revenue NSW. Melbourne and Perth have their own levies, and a lender counts any levy as a holding cost on a commercial property loan.
A private lender can fund a car space, including one that mainstream lenders will not take on its own. Private funding is usually short term and priced above a bank loan, so it suits a quick settlement or a gap before a refinance rather than long-term ownership. Agree the exit strategy before you sign, and see how private lending works for business owners.
A car park counts as commercial property for a loan when it is a block of spaces or a whole car park held for income, and lenders assess it on the lease or the trading figures. A single car space bought alongside a home is usually treated as part of that home loan instead. Because parking is a narrow use, many lenders treat a car park as specialised security and lend more cautiously against it.
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