I recently saw a franchise buyer lose $87,000 at settlement because no one confirmed whether the sale qualified as a GST-free going concern. The vendor assumed it did, and the broker assumed the accountant had checked.
That one mistake turned a solid acquisition into a day-one cash-flow problem.
Buying business premises is not just a property deal. You are testing title, zoning, building compliance, environmental risk, lease terms, lender conditions, and several tax settings inside a contract window that may last only 21 days.
Before you sign, confirm how GST will apply, what transfer duty and land tax will cost, whether the building can lawfully support your use, and what documents must be handed over at settlement. If you wait until the final week, your bargaining power is mostly gone.
Lock these checks in early, and settlement becomes a process instead of a surprise.
Start With the Key Checks
The fastest way to protect your budget is to confirm the high-risk issues before you negotiate price or finance terms.
- Confirm the GST position first. A GST-free going concern needs both parties to be registered for GST, and the business must keep operating until completion. If that test fails, the buyer may need to fund an extra 10 percent at settlement.
- Budget transfer duty on the whole arrangement. In Queensland, land sold with Queensland business assets in one arrangement can be aggregated, so duty may be assessed on the combined dutiable value.
- Model land tax now and after settlement. Queensland individuals have a $600,000 tax-free threshold, assessed each year at 30 June. Under retail shop leases, landlords cannot recover land tax from tenants.
- Check compliance and hazard records. National Construction Code compliance, asbestos status, contamination history, and flood overlays can change value, timing, and insurance cost.
- Get seller disclosure early. From 1 August 2025, Queensland sellers must provide Form 2 and prescribed certificates before contract, including for commercial property.
- Handle foreign resident withholding correctly. For contracts signed on or after 1 January 2025, buyers must withhold 15 percent unless the vendor gives an ATO clearance certificate, with no minimum price threshold.
Define the Scope of Due Diligence
Due diligence works when every risk is tied to a document, a responsible adviser, and a deadline.
For a business premises purchase, that usually means six workstreams: legal and title, planning, building and safety, environmental, lease and income, and tax and funding structure. Each workstream should end with a clear decision, either proceed, renegotiate, or walk away.
Most buyers move through three stages. First, screen the property before making an offer. Next, run the full review during the conditional period. Last, confirm adjustments, insurance, keys, certificates, and handover items before settlement.
Use Property Conveyancing Support Early
Searches and disclosure reviews only help when they are ordered early and read in context.
Queensland buyers deal with title issues, flood mapping, environmental registers, council records, and the seller’s Form 2 disclosure pack under tight time limits. Keeping search orders, follow-up questions, finance dates, and settlement steps aligned is much easier when one adviser is tracking the practical details across the file.
They also need someone to match search results against disclosure material, special conditions, lender requirements, and practical settlement dates before a missed follow-up turns into an avoidable delay or default risk. For that reason, a buyers conveyancer from Cairns Conveyancing Solicitor can help keep QLD searches, disclosure, and settlement timing on track.
See Why Early Checks Matter
Early checks save money because they change both price and structure before you are locked in.
When buyers leave the hard questions until late, they usually lose leverage. The seller knows the clock is running, the lender wants certainty, and the buyer has already spent money on reports.
Avoid Large Tax Surprises
GST, duty, and land tax are not small adjustments. A wrong GST assumption can change the cash needed at settlement by 10 percent, and a weak ownership structure can reduce returns for years.
Keep the Lender Comfortable
Valuers and lenders pay attention to flood exposure, contamination history, fire compliance, and lawful use. Missing documents can slow approval, reduce loan proceeds, or force extra conditions.
Negotiate From Evidence
Verified defects and planning limits give you facts, not guesses. That can support a price reduction, a repair credit, a longer due-diligence period, or a decision not to proceed.
Review the Critical Checks Before You Sign
A good checklist turns vague concern into clear pass-or-fail tests.
Use each item below as a contract condition or a document request during the due-diligence window. If a point matters to value, finance, or lawful use, it should be written into the deal process.
Title, Encumbrances, and Survey
Order a current title search, plan, and details of any easements, covenants, caveats, or leases. Check that the seller has the power to sell and that the legal description matches the contract and any Form 2 disclosure. A survey issue such as an encroaching fence, shared driveway, or car park outside the boundary can affect access and value.
Zoning, Overlays, and Planning
Confirm that zoning permits your actual use, not just a broad class of business. Check hours of operation, signage rights, parking, loading access, noise limits, and any fit-out needs such as grease traps or exhaust systems. In Queensland, review council overlays, the Development Assessment Mapping System, and any State Assessment and Referral Agency triggers, then pull a FloodWise report for Brisbane sites where flood planning may affect insurance or future works.
Building, NCC, and Safety Compliance
Verify the building classification, occupancy approvals, fire systems, essential safety maintenance, and access requirements under the National Construction Code, or NCC. Make sure the current fit-out matches the approved use, because an old approval may not cover a new trading model. For older buildings, request the asbestos register and management plan, noting that in Queensland buildings built after 31 December 1989 generally do not need a register unless asbestos is present.
Environmental Registers and Site Risk
Search Queensland’s Environmental Management Register and Contaminated Land Register. Then ask for any environmental notices, authority records, and prior reports. Sites near service stations, dry cleaners, or mechanical workshops deserve extra care, and a phase one environmental site assessment may be a sensible next step.
Leases, Income, and Outgoings
Match the rent roll to signed leases, options, incentives, and rent review clauses. Read any make-good clause, meaning the tenant’s duty to repair or return the premises to an agreed condition. Under Queensland’s retail shop leases framework, landlords cannot recover land tax from retail tenants, so check that your cash-flow model does not assume a recovery you cannot legally charge.
GST Treatment and Settlement Method
Model three common paths before exchange. A GST-free going concern needs both parties to be registered and the business carried on until completion. A standard taxable supply adds 10 percent GST, with the buyer claiming input tax credits if registered. The margin scheme changes how GST is calculated for an eligible vendor and usually does not sit with going concern treatment, so the contract needs one clear method, not mixed assumptions.
Transfer Duty, Land Tax, and Depreciation
In Queensland, land transferred with Queensland business assets as part of one arrangement can be aggregated for duty, so the tax may be based on the combined dutiable value. Check current year land tax adjustments at settlement and the future annual holding cost. Then arrange a quantity surveyor schedule so you can identify Division 43 capital works deductions, generally 2.5 percent a year for eligible post-26 February 1992 construction, and Division 40 plant and equipment claims where available.
Before you commit finance, it helps to run the full numbers on GST scenarios, duty aggregation, land tax apportionments, depreciation, and ownership structures such as a company, trust, or SMSF, because small assumptions here can alter both the cash needed at settlement and the lender’s view of serviceability. For buyers who want that worked through early, Stones Corner accountants at Spark Accountants can model the position in detail.
Get Tax Modelling Right Before Finance Approval
Tax advice only helps when it is early enough to shape the contract, not just the settlement statement.
If the deal includes land, business assets, lease income, or a lease-back to your operating entity, the numbers should be tested before finance is locked in. Early modelling can show how GST, duty, land tax, depreciation, and ownership options such as a company, trust, or SMSF structure affect cash flow. That gives you lender-ready figures instead of rough estimates.
Build the Right Deal Team
The right team keeps legal, tax, building, and finance work moving on the same clock.
Your property lawyer should draft the due-diligence, finance, and disclosure conditions, order searches, and review title and contract terms. Your accountant or tax adviser should model GST, duty, land tax, depreciation, and the purchase entity before the finance date arrives.
A building consultant should review approvals, fire systems, access compliance, and likely rectification cost. A valuer should work from the correct GST treatment, lease terms, and capital expenditure assumptions, because a valuation based on the wrong inputs can distort both price and loan size.
One person, usually the buyer or project lead, should own the timeline. If no one owns the checklist, the gaps appear at settlement.
Follow a 21-Day Due Diligence Plan
A tight plan stops one missing certificate from consuming the whole review period.
This sample timetable suits a standard 21-day due-diligence window.
- Day 0 to 2: Issue heads of terms or confirm the special conditions. State the intended GST treatment, due-diligence length, finance date, and key document requests. Order title, council, flood, and environmental searches immediately.
- Day 3 to 7: Review zoning, approved use, building approvals, fire records, and access issues. Match the lease file to the rent roll and request any missing certificates or seller disclosure items.
- Day 8 to 14: Finalise tax modelling for GST, duty, land tax, and depreciation. Brief the valuer and lender, then escalate any gap that could affect value, insurability, or lawful use.
- Day 15 to 21: Negotiate repairs, credits, or price changes if needed. Confirm settlement adjustments, insurance, handover documents, and the day-one compliance file for your business.
Make the Property Support the Business
The premises should strengthen your trading business, not drain it with avoidable holding costs.
Ownership can give you control over fit-out, signage, trading hours, and long-term occupancy. It can also create balance-sheet value. Those benefits only show up when the building suits the business, the tax structure works, and the property does not carry hidden compliance or environmental problems.
Treat each contract condition as a protection for capital. Settlement day should confirm what you already know, not reveal what everyone assumed.
Answer the Common Questions
These questions cover the issues that most often disrupt timing, cash flow, or compliance.
When Is a Purchase GST-Free as a Going Concern?
The sale can be GST-free when both parties are registered for GST, the contract states that the supply is a going concern, and the seller carries on the business until completion. If any element is missing, the sale is usually taxable and GST must be funded at settlement.
How Does the Margin Scheme Differ From a Standard Taxable Supply?
Under the margin scheme, an eligible vendor calculates GST on the margin rather than the full sale price. That changes the seller’s GST liability and the buyer’s input tax credit position. It is usually an alternative to, not a version of, going concern treatment.
How Can Duty Aggregation Change the Budget?
If land and Queensland business assets are transferred as part of one arrangement, Queensland Revenue may aggregate them and assess duty on the combined dutiable value. That can make the tax bill much higher than a buyer expects from looking at the land price alone.
Can Land Tax Be Passed On to a Retail Tenant?
No. Under Queensland’s retail shop leases rules, a landlord cannot recover land tax from a retail tenant. If the property is an investment, that cost needs to be built into the holding model from the start.
What Changed With Queensland Seller Disclosure on 1 August 2025?
From that date, sellers of residential, commercial, and vacant land must provide a completed Form 2 and prescribed certificates before contract. Buyers should request the full pack early and check that the property details, title information, and other prescribed documents are complete.
What Is Foreign Resident Capital Gains Withholding?
For contracts signed on or after 1 January 2025, buyers must withhold 15 percent of the purchase price unless the vendor gives a current ATO clearance certificate. The old minimum price threshold has been removed, so the rule can apply at any contract value.
What Depreciation Can a Buyer Usually Claim?
Division 43 generally covers eligible capital works and may allow a 2.5 percent annual deduction for qualifying construction completed after 26 February 1992. Division 40 covers plant and equipment items. A quantity surveyor schedule helps identify what can be claimed from settlement.
Can an SMSF Buy the Premises?
An SMSF may buy business real property through a limited recourse borrowing arrangement if the asset qualifies, the borrowing terms are arm’s length, and any lease to the trading business is also arm’s length. The rules are strict, so structure advice should come before the contract is signed.
