Stop Paying Commercial Rent When Your Medical Practice Can Own The Suite
If you're a GP partner, private surgeon, or dental clinic owner, commercial lease payments are likely the single largest operational check you write each month after nursing and administrative payroll. Over a 15-year lease term, a busy medical practice routinely transfers between $1.5M and $3.5M in non-recoverable rent straight into the bank account of a commercial landlord.
Every dollar of that lease money builds equity for someone else. When your lease expires, the landlord can raise your rent, refuse renewal, or demand expensive make-good obligations—threatening the patient goodwill you spent years establishing in your local community.
Specialized healthcare commercial lending policies allow medical practitioners to take control of their clinical premises by funding up to 100% of the commercial property purchase and medical fitout, with zero requirement to put a mortgage on your family home.
Here is the wealth creation strategy: Your operating medical practice pays market rent to your own Self-Managed Super Fund (SMSF) or property holding trust. That rent is 100% tax-deductible to your clinical business, while paying off an appreciating asset inside a protected 15% (or 0% pension phase) tax shield.
How It Works (Takes 2 Minutes)
1. The Business Real Property Rule for Doctors
Under Section 67A of the Superannuation Industry (Supervision) Act 1993 (SIS Act), a medical consulting suite qualifies as Business Real Property. Your SMSF can buy the property and lease it back to your medical practice company at market commercial rent.
Commercial Medical Suite & SMSF Simulator
Calculate allowable commercial loan size and practice leaseback savings.
| Borrowing Entity | Max Allowable LVR | Tax Environment | Key Statutory Advantage |
|---|---|---|---|
| SMSF Bare Trust (LRBA) | Up to 70% - 80% LVR | 15% Super Tax Rate | 🛡️ SIS Act s 67A Compliant |
| Medical Practice Company / Trust | Up to 80% LVR | Company / Unit Trust | ⚡ Direct Asset Ownership |
| Individual / Partner Doctors | Up to 75% - 80% LVR | Personal Marginal Rate | 📄 Simple Structure |
1. Stop Paying Commercial Rent: Own Your Consulting Rooms with 100% Funding
Under standard Australian commercial banking policies, purchasing business real estate requires a 30% to 35% cash deposit. For a $2,000,000 medical suite, a retail commercial bank demands $600,000 in upfront capital and routinely insists on taking a second mortgage over the doctor's primary family home as additional security.
Specialized healthcare commercial desks operate under completely different underwriting parameters. Because patient billings are resilient and healthcare properties have low vacancy rates, accredited lenders offer 100% commercial property funding secured solely against the clinical freehold itself—keeping your family home legally firewalled and safe.
2. Purchasing Practice Real Estate in an SMSF (Statutory LRBA)
Under Australian superannuation law (Superannuation Industry Supervision Act 1993 - SISA), Business Real Property (BRP) is a statutory exception. Doctors can purchase commercial medical rooms inside their SMSF using a Limited Recourse Borrowing Arrangement (LRBA):
- LVR Limits: Typically 70% to 80% LVR funded by specialist commercial SMSF lenders.
- Arm's-Length Leaseback: Your medical practice signs an arm's-length commercial lease with your SMSF, paying market rent directly into your retirement asset.
- Concessional Tax Treatment: Rental income inside the accumulating SMSF is taxed at just 15%, and capital gains in pension phase drop to 0%.
3. Commercial Healthcare Ownership Structures
| Ownership Structure | Maximum LVR | Security Required | Tax Environment |
|---|---|---|---|
| Direct Entity / Unit Trust | Up to 100% | Commercial property only (No home lien) | Operating tax rate / Distributions |
| SMSF with LRBA | 70% – 80% | Bare Trust / Single acquirable asset | 15% accumulation / 0% pension phase |
| Standard Commercial Loan (Non-Medico) | 60% – 70% | Demands residential property second mortgage | Standard commercial rates with annual reviews |
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"Can my medical practice fit out the consulting rooms after our SMSF buys the property?"