A commercial property loan deposit is usually 30% to 35% of the purchase price, because most lenders lend 65% to 70% of a commercial property’s value. Owner-occupiers with strong financials can sometimes borrow up to 80%, while specialised or vacant properties can need 40% to 50% down. Stamp duty, GST, and purchase costs then sit on top of the deposit.
That last part is where most buyers get caught. The deposit is only one piece of the cash a commercial purchase needs. This guide breaks down the deposit by borrower and property type, then shows what the real upfront cash looks like once the other costs are added.
Key points
- Most lenders cap commercial lending at 65% to 70% LVR, so a typical deposit is 30% to 35%.
- There’s no lenders mortgage insurance on commercial property, so a smaller deposit can’t be insured the way it can on a home loan.
- NSW transfer duty applies to commercial property at the same general rates as residential. On an $800,000 purchase, that’s about $30,187 for contracts from 1 July 2026.
- If the sale isn’t a GST-free going concern, GST adds 10% to the price, and you’ll generally need to fund it at settlement before claiming it back.
- Equity in another property can reduce the cash you need, but it puts that property on the line too.
How much deposit do you need for a commercial property loan?
Most buyers need a deposit of 30% to 35%. The exact figure depends on two things: whether you’ll occupy the property or lease it out, and what type of property it is. Lenders set their maximum LVR around the risk they see in both.
| Borrower and property | Typical maximum LVR | Typical deposit |
| Owner-occupier, standard property, strong financials | Up to 80% | 20% or more |
| Standard office, retail, or industrial with a solid lease | 65% to 75% | 25% to 35% |
| Low doc commercial loan | Up to 75% | 25% or more |
| Short lease, vacant premises, or weaker tenant | 50% to 65% | 35% to 50% |
| Specialised property (childcare, hotel, service station) | 50% to 60% | 40% to 50% |
These are indicative ranges across the market, not a quote. Two lenders can look at the same property and land on different LVRs, which is why checking a specific property against a few lenders’ policies before you commit is worth the time. For a broader look at loan terms, reviews, and how lenders assess a deal, see how commercial property loans work from start to finish.
Why do commercial loans need a bigger deposit than home loans?
Commercial loans need a bigger deposit because lenders see more risk in commercial property and have no insurance to cover it. On a home loan, lenders mortgage insurance protects the lender when the deposit is small. That product doesn’t exist for commercial lending.
Three things drive the lender’s caution:
- Resale risk. If the borrower defaults, a commercial property can take longer to sell than a house, especially if it’s specialised or sitting empty.
- Income risk. An investment property’s value depends heavily on its lease. If the tenant leaves, both the income and the property’s value can drop.
- Market depth. There are fewer buyers for a warehouse or medical suite than for a standard home, so lenders build a bigger buffer into the deposit.
The deposit is the lender’s cushion. The more uncertain the property, the bigger the cushion it wants.
Does the property type change the deposit?
Yes, significantly. Lenders favour property types that lease quickly and sell readily. Standard industrial units and well-located offices or shops sit at the more favourable end. Specialised buildings with a single use sit at the other.
- Industrial and warehouse units: generally well regarded by lenders, particularly standard units with good access.
- Offices: depends on quality and location. Older secondary offices face more scrutiny than modern stock.
- Retail shops: depends heavily on the tenant and the strip or centre. A strong local strip with steady demand is assessed more favourably.
- Specialised property: childcare centres, hotels, and service stations often need 40% to 50% down, because they suit only one type of business.
- Vacant commercial land: typically needs a larger deposit, since there’s no income and the lender relies on your other finances.
“Before a client falls in love with a property, I want to know how a lender will see it,” says Rajeev Vij, founder and broker at LendWise. “I’ve seen two units in the same industrial estate get different LVRs because one had an awkward layout and the other was a standard box with roller doors. The building itself changes the maths.”
Do owner-occupiers need a smaller deposit than investors?
Often, yes. Owner-occupiers buying premises for their own business can access the highest LVRs, sometimes up to 80% with selected lenders. Investors are more commonly capped at 65% to 70%, because their loan depends on a tenant they don’t control.
The trade-off is that owner-occupiers are assessed heavily on their business. Lenders typically want two years of financials, tax returns, and BAS showing the business can carry the repayments. A newer business, or one with uneven trading, may not get the top LVR even when buying a standard property.
What other costs do you need on top of the deposit?
On top of the deposit, budget for NSW transfer duty, possibly GST, and valuation, legal, and loan establishment costs. On commercial deals, these extras can add tens of thousands of dollars to the cash you need at settlement.
Stamp duty on commercial property in NSW
NSW transfer duty applies to commercial property at the same general rates as residential property. For contracts from 1 July 2026, duty on an $800,000 purchase is about $30,187. The NSW first home buyer exemptions don’t apply, because they’re for residential property only. The NSW foreign purchaser surcharge applies only to residential land, so it doesn’t add to a commercial purchase.
GST on commercial property
GST can apply to the sale of commercial property when the seller is registered for GST. A sale can be GST-free if it qualifies as a supply of a going concern, which generally means the property is sold with its lease in place, the buyer is registered for GST, and both parties agree in writing. The ATO sets out the conditions in its guidance on GST and commercial property.
This catches owner-occupiers most often. If you’re buying vacant premises to move your own business into, there’s usually no lease to carry over, so the going concern exemption won’t apply and GST adds 10% to the price. A GST-registered buyer can generally claim it back as an input tax credit, but you’ll typically need to fund it at settlement first. Agents usually quote commercial prices excluding GST, so always check how the contract treats it.
Valuation, legal, and loan costs
Commercial valuations are more detailed than residential ones and usually cost more. Legal costs are also higher, since commercial contracts and leases need closer review. Loan establishment fees vary by lender and deal size.
A worked example
Here’s how the cash adds up on an $800,000 standard industrial unit, bought at 70% LVR:
- Deposit (30%): $240,000
- NSW transfer duty: about $30,187
- GST, if the sale isn’t a going concern: $80,000 (generally claimable later if you’re GST registered)
- Valuation, legal, and loan costs: varies by lender and deal
Even with GST excluded, that’s more than $270,000 before purchase costs. With GST included, the cash needed at settlement can pass $350,000. That gap is why an accurate deposit figure has to include more than the LVR.
Can you use equity instead of cash for a commercial property deposit?
Yes. Many borrowers use equity in their home or another property as additional security instead of putting in the full deposit as cash. The lender takes a mortgage over both properties, which can reduce or replace the cash deposit.
It’s a common and useful structure, but it carries real risk. If the commercial loan runs into trouble, your home is also security for that debt. How the loans are structured matters a lot here. Keeping the security separate where possible, rather than tying several properties together under one lender, can give you more flexibility later if you want to sell or refinance one of them.
“Using home equity is often what makes a first commercial purchase possible,” says Rajeev Vij. “I always slow down at this point and make sure clients understand their home is part of the deal. It’s a perfectly sensible structure, but nobody should sign it without knowing exactly what’s at stake.”
How can you reduce the deposit you need?
You can’t negotiate a lender’s maximum LVR, but you can choose a deal that fits a more favourable one. A few factors consistently help:
- Buy to occupy. Owner-occupiers with solid financials access the highest LVRs.
- Choose standard property. Standard industrial, office, and retail stock gets better LVRs than specialised buildings.
- Look for a strong lease. For investments, a longer lease with a reliable tenant supports a higher LVR.
- Use equity as additional security. This reduces cash, though it ties another property to the loan.
- Prepare full financials. Low doc loans are available, but full doc applications usually reach better LVRs.
Matching the property to the right lender matters as much as the property itself. A commercial loan broker in Sydney can check which lenders offer the strongest LVR for your specific property type and situation before you make an offer.
Frequently asked questions
Can I buy commercial property with a 10% deposit?
It’s very rare. Without lenders mortgage insurance, almost no lender will advance 90% on commercial property. The realistic way to buy with less cash is to use equity in another property as additional security, which can cover part or all of the deposit.
Is the deposit calculated on the price including GST?
Usually, commercial prices are quoted excluding GST, and lenders generally assess the loan against the property’s value rather than the GST component. If GST applies, plan to fund it separately at settlement. Your accountant can confirm whether you can claim it back.
Do I need a bigger deposit for a commercial property in a company name?
Not necessarily. The ownership structure doesn’t change the lender’s LVR by itself. Lenders will usually require personal guarantees from the directors, and they’ll assess the company’s and the directors’ finances together.
Can I use my SMSF to pay the deposit on a commercial property?
An SMSF can buy business real property and may borrow through a limited recourse borrowing arrangement. SMSF lenders often require a larger deposit than standard commercial loans, and the fund must meet strict rules. Speak with your accountant and a licensed adviser before going down this path.
Is stamp duty on commercial property paid from the deposit?
No, it’s a separate cost on top of the deposit. NSW transfer duty is generally due within three months of the contract date or at settlement, whichever comes first. Some buyers use equity to fund it, but the cash still has to be available when duty is due.
Conclusion
The deposit you need for a commercial property depends on the property, how you’ll use it, and which lender assesses it. The cash you need depends on all of that plus stamp duty, GST, and purchase costs. Working out both figures before you make an offer is what stops a good deal from falling over at settlement.
LendWise compares commercial lenders’ LVR policies for your specific property, so you know the real deposit and the real cash needed upfront. Get in touch to run the numbers on a property you’re considering.