Some businesses choose to buy rather than rent their business premises. To do this, they take out a commercial property loan. As with all loans there are many options and things to consider, here are a few:
Repayments and their effect on cash flow
Many small businesses prefer to rent rather than buy for cash flow reasons. However, there are a number of factors that can make buying your business premises an attractive option.
Buying business premises through a self managed super fund
Many businesses these days have their own self managed super funds. Rather than invest in a share or property trust, some of these businesses choose to invest their super funds in their own commercial property.
Interest is tax deductible
If the property is financed by a commercial property loan is used entirely for business purposes, the interest charges on the loan are wholly tax deductible – as are any maintenance charges. If the property is partially used for personal purposes, only a commensurate proportion of your interest and maintenance charges is tax deductible.
Capital gains
Over recent years, property prices have appreciated markedly. You might make a capital gain on your commercial property.
Your circumstances and retirement goals will play a big part in what you both decide to do. Give us a call at 08 8211 7180 or send us an email at info@centramoney.com.au to find out how we can help you achieve your financial goals.