Commercial Finance
Do Commercial Property Loans Include GST?
5 min read- Finance Guide
- Updated 2026
Quick answer
GST may or may not be funded
0% 10%
Potential GST component on a transaction
- GST always applies No
- Some lenders fund GST Yes
- Borrower may need extra cash Sometimes
- Structure matters A lot
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GST and commercial property loans are usually assessed using two main factors
Whether GST applies to the purchase
Not every commercial property purchase has the same GST treatment. Some transactions include GST, while others may be treated differently depending on the nature of the sale.
TAX STRUCTURE
Whether the lender will fund the GST component
Even if GST is payable, lenders vary in whether they will include it in the loan. This can change the amount of cash the borrower needs to complete the purchase.
LENDER POLICYHow GST can affect settlement
Borrowers often need to look beyond just the purchase price
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Net purchase price financed Usually yes
-
GST funded by lender Sometimes
-
Extra borrower cash needed Often possible
For example, if a commercial property has a contract price of $1,000,000 plus applicable GST, the borrower may need to plan for the GST component separately unless the lender agrees to fund it as part of the facility.
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When GST can become important
GST becomes especially important when a borrower is working out total funds required for settlement. Key issues often include:
Whether the contract price is GST inclusive or plus GST- Whether the sale has special GST treatment
- Whether the borrower is registered for GST
- Whether the lender will advance against the GST amount
- How the borrower intends to manage the cash flow impact
If GST is overlooked early, the borrower may find they need more money to settle than expected.
Why lender treatment can differ
Lenders do not all handle GST the same way. Important considerations often include:
Whether GST is expected to be claimed back by the borrower- Whether the facility is structured to cover short term funding gaps
- The lender's policy on total advance against the transaction
This is why two lenders can look at the same purchase and still produce different cash contribution requirements.
Common GST related commercial property scenarios
The GST position can vary depending on the transaction.
Typical scenarios include:
Standard Taxable Sale
GST may apply
The borrower may need to plan for GST at settlement
Going Concern Sale
Different GST treatment
GST may not apply if requirements are met
Lender Funded GST
Possible in some cases
Can reduce the immediate cash burden on the borrower
Because the GST treatment can materially change the funds required, it should be reviewed alongside the finance structure from the start.
Common problems borrowers face
Many borrowers run into issues with commercial property finance because the GST side of the transaction was not properly allowed for at the start.
GST Not Budgeted For
If GST applies and is not included in the borrower's settlement planning, the cash required to complete the purchase may be higher than expected.
Possible solutions include:
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Confirming whether GST applies early
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Checking whether the lender will fund it
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Allowing additional settlement funds where needed
Assuming All Lenders Treat GST The Same
Different lenders have different policies around whether GST can be included in the overall finance structure.
A lender that suits the property may still not suit the GST funding requirement.
Misunderstanding The Contract Price
Some borrowers focus only on the headline purchase price without confirming whether the contract is GST inclusive or plus GST.
This can change both the funding structure and the amount required at settlement.
Applying With The Wrong Lender
Some lenders are more practical than others when a transaction has GST complexity or requires additional structuring.
Using a lender that understands commercial property transactions can help reduce unexpected settlement issues.
Steps to get Commercial Property Finance
Step
01
Determine the purchase price and confirm whether the contract is GST inclusive or plus GST.
Step
02
Clarify whether the sale has any special GST treatment that could affect settlement.
Step
03
Calculate how much deposit, equity, and additional cash may be required.
Step
04
Check whether the selected lender will fund the GST component if it applies.
Step
05
Submit the application with a clear explanation of the transaction structure.
Step
06
Once approved, finalise settlement with the right funds in place for both the purchase and any GST component.
Speak with a Development Finance Specialist
Commercial property transactions can vary significantly depending on the purchase structure, GST treatment, and lender policy.
A specialist can review your scenario and help determine how GST may affect both the finance structure and the funds needed to settle.
Speak with a finance specialist about your commercial property purchase.
Submit the short form below and a specialist will review your transaction and discuss possible funding options.
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Additional Questions
You may also find these questions helpful
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01Can GST affect how much deposit you need for a commercial property loan?
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02Can a lender fund GST on a commercial property purchase?
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03Does GST always apply to commercial property?
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04What is a going concern sale for commercial property?
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05What other settlement costs apply to commercial property purchases?
