Should Your Practice Buy Its Premises Before This EOFY?
Should Your Practice Buy Its Premises? | Switchboard Finance
Whitecoat Hub
Practice Premises · Buy vs Lease · EOFY Timing
Should Your Practice Buy Its Premises Before This EOFY?
The move from tenant to owner is one of the biggest decisions a practice makes, and the end of the financial year tends to force the conversation. This is a strategic look at the buy versus lease call and the timing around it, not a deposit calculator.
Quick Answer
Whether your practice should buy its premises this financial year comes down to timing, not just appetite. Moving from tenant to owner reshapes your security position and your long-term exit strategy, so the decision before the deposit is whether the numbers and the calendar line up.
Start with the decision, not the deposit
The first question is not how much deposit you need; it is whether owning the building genuinely changes your practice for the better over the next decade. That is the decision before the deposit, and it sits above any single number. A practice that is settled, growing and planning to stay put is a very different candidate from one still finding its feet, even when both can technically raise the funds.
Going from tenant to owner changes three things at once: your monthly cost shifts from rent to loan repayments, the building becomes an asset on your balance sheet, and your control of the premises stops depending on a landlord's plans. For many practice owners the appeal is exactly that control, the year you stop paying rent is the year the premises starts working for you rather than for someone else. The buy versus lease call is strategic, and it should be made before anyone starts modelling deposits.
If you would like a structured way to weigh this against your other finance moves, the Whitecoat Hub collects the practice-owner guides in one place, and the practice ownership finance ladder sets out how the facilities usually sequence.
What changes the year you stop paying rent
The year you stop paying rent, your finances re-rate in ways that go beyond the obvious. Rent leaves the profit and loss and a loan repayment takes its place, which changes how your trading figures read to a lender on any future facility. The building also becomes security you control, which can support an exit strategy built around holding the premises into retirement and leasing it back to a buyer of the practice.
This is also where the funding question starts to take shape, because the building purchase rarely stands alone. An owner-occupier commercial property loan usually carries the bulk of it, but the deposit, the settlement-adjacent costs and the working capital you need to keep trading through the transition all have to come from somewhere too.
The case for staying a tenant
Owning is not automatically the stronger move, and a good decision starts by taking leasing seriously. Renting keeps capital free to put back into the practice, into equipment, people and growth, rather than tying it up in a deposit and an illiquid building. It also keeps you mobile: if the practice outgrows the rooms, or the suburb shifts, a tenant can move at the end of a lease in a way an owner cannot.
There is also the simple matter of focus. A premises purchase adds a commercial facility, a valuation, outgoings and a maintenance bill that used to be the landlord's problem. For a practice still finding its rhythm, or an owner who would rather not be a property manager on top of running the rooms, staying a tenant can be the more disciplined choice. The point is not that leasing wins, it is that owning has to clear a higher bar than simply being possible.
When buying the premises is the wrong move
Buying is the wrong move more often than the deposit alone would suggest. If the lease still has cheap years to run, if the capital would do more work inside the practice than locked in the walls, or if the partnership behind the practice is not settled on staying put, the timing is probably not right yet. The same applies when an owner is close to winding down without a succession plan, because the building can become an asset nobody in the next chapter wants to carry.
Location is the quiet one. Premises that suit the practice today may not suit it in five years if the patient base, parking or foot traffic is already drifting. None of these are reasons to never buy, they are reasons to be honest about whether this building, at this point, earns the commitment. If you are not sure which of these describes you, that is exactly the conversation to have before you commit to a price.
Where the equity for the deposit comes from
Where the equity comes from is the question that decides whether the timing is real or aspirational. If the cash is sitting in the practice or in offset, the path is simple. If it is not, the deposit usually comes from equity already built up in a home or an investment property, released without disturbing the loan that sits against it. A second mortgage can release that trapped equity to cover the deposit gap, and the second mortgage versus commercial property loan comparison walks through how the two facilities sit together on a premises deal. If you want to know whether the deposit is within reach before you commit to the strategy, you can see where you stand.
The other half of the funding picture is the cashflow you need to keep trading smoothly through the purchase year. The premises loan will not cover outgoings, fit-out tidy-ups or the billing-cycle gaps that settlement creates, which is where a business line of credit earns its place as a standby. None of this is bridging; it is ordinary equity-release and standby structure, and the owner-occupier equity tiers guide shows how lenders read the layered security.
What settling before 30 June changes at tax time
Settling before 30 June changes your timing and your paperwork far more than it changes your tax outcome on the building itself. Real property and capital works are not covered by the instant asset write-off, so the purchase of the premises does not produce an upfront deduction the way a piece of equipment might. The widely discussed permanent $20,000 instant asset write-off announced for 1 July 2026 is a Federal Budget measure that is not yet law and applies per asset to equipment, never to a building, so treat it as equipment context only and confirm the detail in the 2026-27 Budget tax reform material.
There are still real timing reasons the conversation lands at EOFY: depreciation on any equipment you buy alongside the move, the way a settled purchase reads against the new financial year, and the simple fact that leases and practice plans often turn over on 30 June. If the purchase also changes existing debt, a refinance can reset the structure at the same time, and a later home loan can be approached through the One Doc home loan lane once the commercial facility is on the file. Because several of these measures are announced rather than settled, route the tax detail to your accountant and keep the premises decision standing on its own merits. The Whitecoat loan pack pulls the practice-owner facilities together if you want to see how they combine.
Buying your premises is a tenant to owner decision first and a deposit question second. It makes sense when the practice is settled, when you intend to hold the building long enough for it to matter, and when the deposit and the working capital can both be funded without strain. EOFY shapes the settlement timing and the equipment depreciation, but the building purchase should stand on the strategy, not the calendar, and the announced Budget measures should be confirmed with your accountant rather than relied on as settled law.
Key takeaway: Decide whether owning the premises fits your ten-year plan first, then map where the deposit and the standby cashflow come from before you settle before 30 June.Frequently Asked Questions
Whether your practice should buy its premises before EOFY depends on whether the calendar and the numbers line up, not on the 30 June date alone. Buying makes sense when the practice is settled, the deposit can be funded without starving working capital, and ownership improves your long-term exit strategy. The end of the financial year matters for settlement logistics and equipment depreciation, but it is rarely a reason to rush the building itself.
Whether it is better to keep leasing or buy the building your practice operates from is a strategic call, not a pricing one. Leasing keeps capital free and flexible, while buying converts rent into equity and gives you control of the premises and your security position. The decision before the deposit is whether you intend to stay put for the long run and want the building to form part of your retirement plan.
The deposit you need to buy your practice premises as an owner-occupier typically sits around 20 to 35% of value, indicative and varies by lender. Specialist and non-bank funders read a sitting-tenant owner-occupier differently from a passive investor, so the security mix and your trading history both influence the figure. It is worth weighing the deposit against an owner-occupier commercial property loan and speaking to a broker before you commit a number, because the deposit gap and the funding path are decided together.
Buying your premises before 30 June does not hand you an upfront deduction for the building itself, because real property and capital works are not covered by the instant asset write-off. The announced permanent $20,000 write-off from 1 July 2026 is a Budget measure that is not yet law and applies per asset to equipment, not to a building, as set out in the 2026-27 Budget tax reform material. Route the tax detail to your accountant and treat the premises decision on its own merits.
If you do not have the cash for the deposit, it can come from savings, released equity in property you already hold, or a blend of facilities. A second mortgage can release trapped equity to cover the deposit gap, while a refinance of existing debt can reset your structure ahead of the purchase. Where the equity comes from shapes the whole deal, so map the funding path before you sign anything.
FBAA Accredited
