Fund the GST on your commercial property purchase and reclaim it later
When purchasing a commercial property, GST is often payable at settlement on top of the purchase price. This can create a significant short-term cash flow gap, even though the GST is usually recoverable.
A GST Loan allows you to fund the GST component of a commercial property purchase upfront, complete settlement on time, and repay the loan once the GST refund is received from the ATO.
Understanding commercial property GST is essential when buying or selling commercial real estate. Unlike residential property, most commercial property transactions attract GST unless a specific exemption applies as outlined by the Australian Taxation Office guidance on buying commercial property.
In a standard transaction, GST on commercial property is charged at 10 per cent of the purchase price and is payable at settlement. Most lenders do not fund this component, leaving buyers to bridge the gap themselves.
A GST Loan is a short-term funding solution designed specifically to cover the GST portion of a commercial property purchase.
It allows you to:
This structure is commonly used for warehouses, offices, retail premises, industrial assets, and other commercial property purchases.
A commercial property is purchased for $1,500,000.
If the transaction is taxable, GST on the commercial property sale is $150,000.
At settlement, the buyer must fund:
Purchase price: $1,500,000
GST: $150,000
Total settlement funds: $1,650,000
A GST Loan can fund the $150,000 GST amount, allowing the buyer to reclaim it later and repay the loan once the refund is received.
GST generally applies to a GST commercial property sale when:
In these situations, GST on the sale of commercial property must be paid by the buyer at settlement, even though the GST may later be claimed back through a BAS.
Even when GST is recoverable, the timing creates challenges.
While GST on commercial property is often recoverable, buyers usually need to wait until their next BAS is lodged and processed before claiming GST credits through their BAS, which can create a short-term cash flow gap.
This is where a GST Loan becomes valuable.
Misunderstanding commercial property GST can lead to costly issues, including:
Each transaction should be assessed individually, with accounting and legal advice obtained before contracts are exchanged.
If you’re buying commercial property and need to manage the upfront GST obligation, a GST Loan can help you settle on time without tying up cash flow.
Understanding GST on commercial property sales and planning for it early leads to smoother settlements and fewer surprises.
A GST loan is a specialised short-term bridge loan designed to cover the 10% Goods and Services Tax (GST) payable on commercial property transactions in Australia.
Banks typically don't fund the 10% GST portion of a property purchase price. A GST loan bridges this gap so you don't have to use your own working capital to cover the tax component of the transaction.
Most traditional lenders do not fund the GST component, which is why GST Loans are commonly used.
It's structured as a short-term facility that you repay once your business receives its GST refund from the Australian Taxation Office (ATO). This refund comes through after you lodge your Business Activity Statement (BAS), which typically happens quarterly.
In most cases, yes. The Australian Tax Office (ATO) typically requires you to pay 10% GST on commercial property purchases. When you're buying, selling, or leasing commercial property, the ATO classifies you as an enterprise, which triggers GST obligations on the transaction.
Since most banks won't fund the GST portion of your purchase, this means you'll need to cover the tax component separately. Property.Credit offers short-term GST loans specifically designed to bridge this gap, so you don't have to tie up your working capital. You simply repay the loan once you receive your GST refund from the ATO after lodging your Business Activity Statement (BAS).
The minimum GST loan is $30,000. There is no maximum amount. However, facilities over $1 million will require further discussion and you will be assigned a representative to assist with this.
The minimum term is 1 month and the maximum may vary.
We offer loans to commercial borrowers for commercial purposes only.
No. We are a finance company offering financial solutions to real estate professionals and their clients.
In this guide, we’ll walk you through key considerations, from traditional and alternative financing options to the often-overlooked 10% GST (Goods and Services Tax) on commercial property purchases. First-time buyers are often surprised to learn that GST must be paid upfront*, which is why we’ll also explore how a short-term GST loan can help bridge the gap. - Read more
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