As a business owner, owning the premises you trade from has real advantages. 

There are a few things to consider before you do:

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1. Ownership options

If you’re a business owner, you can purchase the property through the business, as an individual or through a partnership or trust.

Your situation will dictate which options you have, and there are pros and cons to each alternative. We suggest you get advice on what’s best for you.

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2. GST

A lot of commercial property buyers want to know the tax implications of owning their property compared to leasing it.

Most commercial property purchases are zero-rated for GST. You can also write off the interest you pay on your mortgage and use depreciation to lower your income and pay less tax. 

Your lawyer or accountant can advise you on exactly what effect owning a property will have on your tax obligations.

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3. Refinancing for business growth

If the property gains value over time, you can use that value to finance the growth of your business. This is how property owners convert gains into cash that can be invested back into fuelling the business.

Trading property equity for business growth is reasonably straightforward with legal/financial help.

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4. Reconfiguring space

Owning a property gives you the opportunity to optimise the space for both your own business and potentially others.

You may be able to make doing business more efficient, adding to your profitability. You could also create additional space that you can lease out to another tenant. 

Depending on the work involved, you may need to get advice to ensure you comply with relevant regulations. If you’re bringing in a tenant, you’ll need to set up your own leasing agreement with them.

There’s a lot to consider when you’re looking at purchasing a commercial property for your business - this is just the beginning.

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To get a better handle on how purchasing a commercial property might impact you and your business, get in touch with NZ Legal today by completing a form below. 

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