Buying a Medical or Dental Practice Premises

Medical and dental practice premises are a distinct category of commercial purchase, whether you are a practitioner buying to occupy the space yourself or an investor buying a premises with a medical or dental tenant already in place. The specialised plumbing, electrical and structural fit-out required for clinical work, along with the regulatory and lease conditions that come with it, mean a general commercial due diligence checklist is not enough on its own.

Fit-Out Value and Fixtures

A dental surgery or medical clinic typically has significant fixed fit-out: dental chairs and suction plumbing, x-ray and imaging equipment, sterilisation rooms, reinforced flooring, and dedicated wet areas. Before exchange, get clarity on what is included in the sale as a fixture attached to the property versus what belongs to the outgoing practitioner as chattels or leased equipment. Where the practice itself is being sold as a business alongside the property, a separate business sale agreement usually covers equipment, goodwill and patient records, and it needs to be reviewed alongside the contract for the premises to avoid gaps or duplication between the two documents.

It is also worth having an independent valuation of the fit-out separate from the land value, particularly if finance is involved. Lenders often treat clinical fit-out and equipment differently from the underlying real property when assessing security, and a purchase price that bundles land, building and equipment into a single figure can complicate both your finance application and any future resale, since a buyer several years later will be assessing a different vintage of equipment against the same building shell.

Zoning and Change of Use Approval

Medical and dental use is treated differently under planning schemes depending on the state and the specific zone. Some council areas permit medical centres as of right in commercial zones but require a development or use application in others, particularly if the premises sits in a mixed-use, residential or heritage-affected area. If you are converting a retail shop or office suite into a clinical practice for the first time, confirm the required use class and any conditions around parking ratios, accessibility compliance and hours of operation before you commit, since a change of use approval can take considerably longer than a standard settlement period allows for.

Plumbing, Radiation and Health Department Requirements

Clinical fit-outs involving x-ray equipment, sterilisation autoclaves or specialised waste plumbing may trigger notification or licensing requirements with the relevant state radiation safety authority or health department, separate from any local council approval. If the practice includes an existing radiography suite, confirm the current licence status and whether it transfers with a change of practitioner or requires a fresh application. These regulatory steps sit outside standard conveyancing searches, so it is worth engaging the relevant compliance adviser early rather than assuming existing approvals carry across automatically.

Lease Considerations for Investors

Where you are buying the premises as an investment with a medical or dental tenant in place, review the lease closely for make-good obligations relating to the specialised fit-out, since removing plumbed dental chairs or lead-lined radiography walls at lease end can be a significant undertaking compared with a standard office fit-out. Also check whether the lease includes a restraint of trade or exclusivity clause preventing a competing practice from opening nearby, as these clauses are common in medical and dental leases and affect the ongoing value of the tenancy. If the lease is due for assignment or renewal around settlement, understand how that timing interacts with your commercial lease assignment when a property sells obligations.

GST and Structuring

Whether GST applies to the sale depends on how the transaction is structured, including whether it qualifies as the GST-free sale of a going concern where the business and premises transfer together, or a standalone property sale with an existing lease in place. Practitioners buying their own premises through a self-managed superannuation fund or a separate property trust also introduce additional structuring considerations. These points are genuinely specific to your circumstances and the way the deal is put together, so treat this as general information rather than tax advice and confirm the GST and structuring position with your accountant before finalising the contract.

Accessibility and Compliance Standards

Medical and dental premises accessed by patients, including those with mobility limitations, are generally expected to meet accessibility standards for public-facing premises. Check whether the existing fit-out already complies or whether upgrades to entryways, bathrooms or corridor widths would be required to bring the practice up to standard, since retrofitting these features into an older building can be more involved than in a purpose-built medical centre.

Parking, Signage and Patient Access

Patient flow matters more for a medical or dental practice than for many other commercial tenancies, so check the on-site or nearby parking allocation carefully, including whether any bays are reserved specifically for the practice or shared across a broader commercial strip. Confirm what signage the local council permits, since medical and dental practices often want street-facing identification that some heritage overlays or strata by-laws restrict. If the premises forms part of a larger commercial or strata complex, review the body corporate or owners corporation rules for any restrictions on trading hours, waste disposal for clinical materials, or after-hours access for patients attending emergency appointments.

Bringing It All Together

Because a medical or dental practice purchase blends commercial property law, lease law, health regulation and sometimes a separate business sale, it is worth having your conveyancer review the contract alongside your accountant and, where relevant, a lawyer experienced in practice sales. Special conditions making the contract subject to confirmation of zoning, fit-out compliance and any required licences give you protection if something does not check out during due diligence, rather than discovering a problem after you have already committed. A general due diligence checklist for commercial property purchase is a useful reference point to adapt for your specific practice purchase.

If you are also arranging finance secured against the premises, factor a refinancing review into your planning where an existing loan on another property is involved, and if you have questions before committing to a contract, our FAQ page covers common conveyancing queries or you can contact us directly.