Medical practice loans in Melbourne: how Victorian payroll tax, the property tax on rooms, precinct rents and lender appetite change what you prepare.
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Medical Practice Loans · Melbourne · The Victorian Overlay
A Melbourne practice loan is the same product as anywhere in Australia. What changes is the Victorian overlay: payroll tax on contractor practitioners, the commercial and industrial property tax on rooms, precinct rents and which lenders are active. Here is what a Melbourne practice prepares before applying.
Quick Answer
A medical practice loan in Melbourne is the same product a practice would borrow anywhere in Australia, and what changes is the Victorian overlay: payroll tax on practitioners, the property tax on rooms, precinct rents and which lenders are active. Before applying, a Melbourne practice checks four things: its written payroll tax position under the State Revenue Office's rulings, whether any rooms it buys fall into the commercial and industrial property tax transition, how the precinct rent line sits against practice income, and which lender types are funding goodwill and practice loans in Victoria right now.
Also called: physician practice loans Melbourne, healthcare practice loans Melbourne. "Physician" is US wording that Google folds into the same query; both mean the same product.
What is different about a medical practice loan in Melbourne?
The loan products are national; what is different in Melbourne is the Victorian overlay that sits on top of them. A business loan for a doctor, a goodwill facility for a practice acquisition or a commercial property loan on consulting rooms is written to the same credit policy whether the practice is in Melbourne, Brisbane or Perth. The lender's forms do not change at the state border.
What the lender reads into those forms does change. Four Victorian factors move the numbers on a Melbourne file: the State Revenue Office's position on payments to contractor practitioners, the commercial and industrial property tax that now sits on rooms bought from the middle of 2024, the rent a practice pays in the precinct it has chosen, and the appetite of the lender types that are active in Victoria at the time. None of them is a product. Each of them changes serviceability, security value or the conditions on an approval.
This post is the city-level read. If the question is how to buy a practice at all, the medical practice acquisition loan post covers the national mechanics, and the practice finance guide sits above both. The sections that follow take the Victorian overlay one factor at a time and end with what a Melbourne practice prepares before it applies.
How does Victorian payroll tax on contractor practitioners change a Melbourne practice loan?
Victorian payroll tax changes a Melbourne practice loan by turning the practitioner payments on the profit and loss into a question the lender now asks about in writing. Under Victoria's relevant contract provisions, as explained in the State Revenue Office's ruling on medical centres (PTA-041), payments a practice makes to contractor practitioners under a service or facility arrangement can be treated as wages for payroll tax, unless one of the exclusions in the ruling applies. The State Revenue Office's medical industry page sets out the current position and should be read before any application is lodged.
For general practice there is relief. The fully-funded GP work exemption, from 1 July 2025, exempts wages paid or payable by a GP medical business to employee and contractor GPs where they relate to fully-funded items of GP work, calculated on a proportional formula the State Revenue Office publishes. Alongside it, the State Revenue Office has offered ex gratia relief on contractor GP payments for earlier periods, running to 30 June 2025 for a GP business that meets its conditions. The exemption is for GP businesses only; it does not reach dental or allied health practices, which is where section seven of this post picks up.
What does the lender want to see on payroll tax?
The lender wants a written payroll tax position, not a verbal assurance that the practice "uses contractors". In our own files, the practices that move through credit fastest arrive with a short letter from their accountant or tax adviser stating whether the practitioner agreements are relevant contracts, which exclusion or exemption the practice relies on, whether any registration or relief claim has been lodged with the State Revenue Office, and whether a provision has been raised for back years. A lender that sees a practice has registered for the GP relief and provisioned for the rest typically prices the file on its real profit. A lender that sees nothing treats the exposure as an unquantified liability and either discounts the profit or asks the question itself, which costs weeks. The national picture, state by state, is in the payroll tax for medical practices post; here the point is that a Melbourne file carries the Victorian answer on top.
What does the commercial and industrial property tax mean if a Melbourne practice buys its rooms?
The commercial and industrial property tax means that a Melbourne practice buying its rooms now pays an entry-transaction duty once and then, after a transition, an annual tax on the land instead of duty on later transfers. Victoria's commercial and industrial property tax (CIPT) applies after a ten-year transition that begins with a relevant entry transaction on or after 1 July 2024. Once it applies, CIPT is generally charged at a flat 1 per cent of the property's site (unimproved) value each year, provided the property keeps a qualifying commercial or industrial use. The State Revenue Office's Understanding CIPT page carries the current detail.
For a practice the questions are practical. A CIPT entry transaction is the first qualifying sale of the rooms on or after that date; the buyer in that transaction typically still pays land transfer duty on it, and the State Revenue Office notes a transition loan is available from the state's treasury corporation for that duty. Later transfers of a property already in the ten-year transition may be exempt from land transfer and landholder duty, which can matter to the practice's exit value. Whether consulting rooms have a qualifying use is read from the property's valuation classification code, and the State Revenue Office lists office uses but each set of rooms is confirmed individually. Land tax continues on its own rules during the transition; CIPT is a separate annual charge, not a replacement for it. The GST and duty mechanics on a rooms purchase are covered in the GST and stamp duty on medical rooms post and are not repeated here.
What this does to the loan is straightforward. A lender writing a commercial property loan on Melbourne rooms will add the annual CIPT, once it starts, to the outgoings line in its serviceability calculation, and will want to know whether the practice is buying inside or outside the transition. The buying a clinic with a commercial property loan post covers the loan structure itself; the medical centre freehold guide covers the freehold decision. The table below gathers the Victorian rules that this section and the last one describe.
| Victorian rule | What it is | Who it reaches | What the lender asks for |
|---|---|---|---|
| Payroll tax on contractor practitioners (relevant contracts) | Payments to practitioners under service or facility arrangements can be treated as wages under Victoria's relevant contract provisions, as applied by ruling PTA-041, unless an exclusion applies. | Medical, dental, specialist and allied health practices that engage practitioners as contractors. | A written payroll tax position from the accountant, the practitioner agreements, and any provision raised for back years. |
| Fully-funded GP work exemption (from 1 July 2025) | Wages paid or payable by a GP medical business to employee and contractor GPs are exempt where they relate to fully-funded items of GP work, on a proportional formula. | GP businesses only. Does not apply to allied health or dental practices. | Evidence the practice has applied the formula, and the billing data that supports the fully-funded share. |
| Ex gratia relief (periods to 30 June 2025) | Relief on contractor GP payments for earlier periods, subject to the State Revenue Office's published conditions on when the practice received advice. | GP businesses only. | Confirmation of the relief claimed, and the position for any period the relief does not cover. |
| Commercial and industrial property tax on rooms (entry transactions from 1 July 2024) | After a ten-year transition that starts with the entry transaction, an annual tax of generally 1 per cent of site value, while the property keeps a qualifying use; later transfers in transition may be exempt from duty. | Any practice that buys its rooms in a qualifying sale on or after 1 July 2024, directly or through an entity. | Whether the purchase is an entry transaction, the qualifying use position for the rooms, and the projected annual CIPT in the outgoings. |
| Land tax during the transition | Land tax continues to apply on its own rules; CIPT is a separate annual charge that sits alongside it rather than replacing it. | Practices or entities that hold Victorian land above the land tax threshold. | The current land tax assessment on the rooms, or the figure the lender will assume if the purchase is new. |
Sources: State Revenue Office Victoria, Payroll tax and the medical industry, last updated 22 October 2026. Read 22 October 2026. State Revenue Office Victoria, Understanding commercial and industrial property tax, last updated 29 September 2026. Read 22 October 2026.
Where do Melbourne medical practices cluster, and how does rent change the loan?
Melbourne practices cluster around the hospital precincts and a handful of suburban centres, and the rent each precinct commands becomes a line the lender tests practice income against. Parkville and the inner hospital precinct draw specialists and research-adjacent practices; Box Hill, Clayton and Monash, and Heidelberg each sit around a major hospital and carry their own specialist and allied health clusters; the growth corridors to the north, west and south east are where new general practice, dental and allied health rooms open to follow population. Each has a different rent profile and a different patient base, and a lender reads both.
The precinct rent line matters because a practice loan is serviced from practice income after occupancy costs. Rooms near a hospital can be worth their rent for a specialist who draws referrals from it; the same rent on a bulk billing general practice in a growth corridor would consume the margin the lender is relying on. The sub-regional checklists cover the local detail: northern Melbourne, eastern Melbourne, south east Melbourne and the Mornington Peninsula, the inner west and Geelong and the Surf Coast.
Precinct rent line that helps the loan
- Rent sits comfortably inside the share of income the lender allows for occupancy, after practitioner payments.
- The precinct supplies the patient base the practice bills: referrals near a hospital, population growth in a corridor.
- The lease term runs past the loan term, or the practice owns the rooms with the CIPT position known.
- Rent reviews are fixed or capped, so the outgoings line does not move faster than fees.
Precinct rent line that drags the loan
- Hospital-precinct rent on a practice whose billing mix does not draw on the hospital.
- A short lease, or an option the landlord controls, with a fit-out loan running longer than the tenancy.
- Market rent reviews that reset the outgoings line mid-loan.
- Rooms bought in a growth corridor before the population and the practitioners arrive, with CIPT not yet modelled.
In our own files, the precinct question rarely decides an approval on its own, but it decides how much goodwill a lender is prepared to fund and whether the rent line forces a smaller facility than the practice asked for. A practice that can show the lender why its rent matches its billing mix answers the question before it is asked.
Which kinds of lenders are active on Melbourne practice loans right now?
Three lender types are active on Melbourne practice loans at the time of writing: the health divisions of the major banks, non-bank lenders, and specialist funders that lend to professionals only. The mix is the same across Australia; what differs in Melbourne is how each type reads the Victorian overlay, and that is worth knowing before a practice picks a door to knock on.
- Bank health divisions. Typically the deepest goodwill funding for an established practice with clean financials and a settled payroll tax position, often at the sharpest pricing, and typically the slowest to approve once a file carries an open question such as unprovisioned back years.
- Non-bank lenders. Typically faster and more willing to lend against practice cash flow where the Victorian overlay leaves a grey area, provided the practice can document its position; pricing varies by lender and sits above the banks in many cases.
- Specialist funders. Professional-only lenders that know practice income shapes and will read a service entity or a tenant doctor structure without a long explanation, with appetite that moves with their own funding lines.
Goodwill funding levels are described in general terms only here because they vary by lender, by practice type and by month. The who funds goodwill guide covers the national picture, the medical finance companies post explains each lender type in more depth, and the bank to non-bank refinance post covers moving a practice loan between them. A broker who works the Victorian lane knows which lenders have tightened on contractor-heavy practices this quarter and which have not; that is most of the value in the introduction.
How do bulk billing changes, urgent care clinics and corporate buyers change the income read on a Melbourne practice?
Bulk billing changes, urgent care clinics and corporate buyers change the income read by shifting what a lender assumes about a Melbourne practice's billing mix, payer concentration and practitioner retention. The billing mix read is the first of these: a lender looks at the split between bulk billed, mixed and private billing, because the Medicare incentive settings for bulk billing have moved more than once in recent years and a practice that depends on one setting carries more income risk than one with a mix. In Victoria the billing mix also feeds the GP payroll tax exemption, since the fully-funded share is what the exemption formula counts, so the same report serves two purposes on a Melbourne file. The bulk billing to mixed billing cashflow plan post covers the transition itself.
Urgent care clinics change the read in two directions. For a practice near one, they can take the after-hours and walk-in work that used to pad the roster, which shows up as a flatter billing line. For a practice that wins an urgent care contract, the income is real but it is concentrated on a funding program, and a lender will ask what happens to the roster if the program changes. Corporate buyers are the third factor: in Melbourne, as elsewhere, corporate groups have been buying practices and competing for practitioners, which affects the practitioner retention assumptions a lender makes and the goodwill it is prepared to recognise. A practice that can show practitioner tenure, a contractor agreement that survives a change of ownership and a stable billing mix over its trading history answers all three questions at once.
Are dental and allied health practices in Melbourne treated differently from GP clinics?
Dental and allied health practices in Melbourne are treated differently from GP clinics on payroll tax, and that difference lands on the loan file. The fully-funded GP work exemption, from 1 July 2025, and the ex gratia relief that preceded it are for GP businesses only. The State Revenue Office states plainly that the exemption does not apply to allied health professionals and dentists. A Melbourne dental practice or physiotherapy group that engages practitioners as contractors therefore carries the full relevant contract exposure on its file, with no state relief to point to, unless one of the ruling's exclusions applies to its arrangements.
For the loan this means the written payroll tax position is not optional for a dental or allied health practice; it is the first thing a lender reads after the financials. A practice that has had its agreements reviewed, restructured where needed and provisioned for any back years presents as a known quantity. One that has not will typically see the lender apply its own estimate of the liability against profit, which reduces serviceability and goodwill lending in one step. The Victorian equipment side for a dentist, including the radiation licensing order and class-by-class residuals, is covered in the dentist equipment financing in Melbourne post; the contractor and payroll tax question for an allied health group is in the allied health practice loans post. Neither is repeated here.
What should a Melbourne practice prepare before applying?
A Melbourne practice should prepare the six items below before applying, because together they answer every Victorian question a lender will raise and let the application be assessed on the practice's real numbers rather than on the lender's assumptions.
- Written payroll tax position. A letter from the accountant or tax adviser stating whether the practitioner agreements are relevant contracts, which exclusion or exemption applies, what has been lodged with the State Revenue Office and what has been provisioned.
- Practitioner agreements. The current service or facility agreements for every contractor practitioner, so the lender can read the structure for itself rather than take a description of it.
- Lease or rooms position. The lease with its term, options and review clauses, or for owned rooms the title, the land tax assessment and the CIPT position, including whether the purchase was an entry transaction on or after 1 July 2024.
- Billing mix report. The split between bulk billed, mixed and private billing by practitioner over the last two years, which supports both the serviceability read and, for a GP business, the fully-funded share in the exemption formula.
- BAS and bank statements. Lodged activity statements and the practice's bank statements for the period the lender asks for, with practitioner payments identifiable.
- Registrations. Current Ahpra registration for every practitioner, the practice's accreditation where it holds one, and any registration lodged with the State Revenue Office for the GP relief.
The whitecoat pack sets out the full document list for a practice application; the six items above are the Victorian additions to it. A practice with the list in hand can check eligibility in a few minutes and have a realistic conversation about facility size before any lender is approached.
A medical practice loan in Melbourne is a national product with a Victorian overlay. Payroll tax on contractor practitioners now needs a written payroll tax position, with the GP exemption helping general practice and leaving dental and allied health carrying the full exposure. The commercial and industrial property tax changes what a practice pays over the life of rooms bought from the middle of 2024. The precinct rent line and the billing mix read decide how much goodwill a lender will fund, and three lender types are active, each reading the overlay differently. The practice that prepares the six Victorian items before applying is assessed on its real numbers.
Key takeaway: Get the payroll tax position in writing and the rooms position settled before any Melbourne lender sees the file, because those two answers set the profit the lender will lend against.Frequently Asked Questions
There is no single best bank for a medical practice loan in Melbourne, because the right lender depends on the practice's payroll tax position, its billing mix and how much goodwill it needs funded. Bank health divisions typically fund the most goodwill for an established practice with a settled file, non-bank lenders typically move faster where the Victorian overlay leaves a grey area, and specialist funders read practice structures without a long explanation. The medical finance companies post explains each type, and a broker matches the file to the lender that is active on Melbourne practices that quarter.
Physician practice loans in Melbourne are the same product as medical practice loans; "physician" is US wording that search engines fold into the same query. In Australia the loan is a business loan or goodwill facility written for a doctor, dentist, specialist or allied health owner, and the business loans for doctors post covers the national product. The Melbourne difference is the Victorian overlay described in this post, not the loan itself.
Medical equipment finance in Melbourne is usually written as a separate facility from the practice loan, secured on the equipment itself rather than on practice goodwill or cash flow. Some lenders will bundle an equipment line into a wider practice facility, but the term, security and pricing still follow the asset, and the Victorian detail for a dentist, including radiation licensing and residuals by equipment class, sits in the dentist equipment financing in Melbourne post. Ask for both facilities in one conversation so the lender sizes the practice loan with the equipment repayments already counted.
Payroll tax relief for GP clinics in Victoria is in place in 2026: from 1 July 2025, wages paid by a GP medical business to employee and contractor GPs are exempt where they relate to fully-funded items of GP work, on a formula the State Revenue Office publishes, and ex gratia relief has covered earlier periods for practices that met its conditions. The relief is for GP businesses only and does not extend to dental or allied health practices, whose contractor position is covered in the allied health practice loans post. Confirm the current terms on the State Revenue Office's medical industry page before relying on them in a loan application.
Owning the rooms is not a requirement for a medical practice loan in Melbourne; most practice loans are written against practice income and goodwill, with the practitioner's guarantee, while the rooms are leased. Owning the rooms brings a separate commercial property loan into the picture and, for rooms bought from 1 July 2024, the commercial and industrial property tax transition described in this post. A lender will want the lease or the title either way, because the occupancy cost is a line in the serviceability calculation whichever way the practice holds its premises.
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