The WA Business Acquisition Guide

The one thing most WA buyers get wrong

In Western Australia you pay transfer duty on the goodwill, not just the gear. WA still charges duty on business assets including goodwill, intellectual property, client lists, business licences and restraint of trade agreements under the Duties Act 2008 (WA). New South Wales abolished duty on most non land business assets from 1 July 2016 and South Australia did the same from 2015, so a lot of the advice a WA buyer reads online is written for a state where this cost does not exist. On a business priced at $1.2 million with $900,000 of goodwill, the duty is calculated on the goodwill too.

Put the number on that example. The WA general rate is $28,453 plus $5.15 per $100 of dutiable value above $725,000 (WA Department of Treasury and Finance, transfer duty assessment, checked 16 August 2026). Duty on the full $1.2 million of dutiable value is approximately $52,916. Had only the $300,000 of tangible assets been dutiable, it would be approximately $8,835. The $900,000 of goodwill therefore adds roughly $44,081 to the duty bill, and it is cash, due within a month of the assessment notice, that cannot normally be added to the loan. These are worked examples, not an assessment.

Source: Duties Act 2008 (WA), summarised in the WA Government Duties Fact Sheet: Business Assets, and the NSW and SA positions per Revenue NSW. Checked 9 August 2026. Confirm your exact liability with your solicitor or RevenueWA before you sign.

Two practical points that follow from this, and that catch buyers out more often than the rate itself:

• There is a concessional rate, but the threshold is low. A concessional rate can apply where the dutiable property is a WA business asset and the dutiable value of the entire property does not exceed $200,000. Above that, the general rate scale applies. On any business of meaningful size, assume the general rate (WA Department of Treasury and Finance, transfer duty assessment, checked 9 August 2026).
• Duty is generally payable within one month of the assessment notice, not at some vague point after settlement. It is paid from your own funds and cannot normally be added to the loan, so it is a cash item on a clock. Buyers who have budgeted to the last dollar for the deposit are the ones this hits.

What you are actually buying

Every business sale is either an asset sale or a share sale, and the choice changes the funding, the tax and the risk. In an asset sale you buy the specific assets: the equipment, the stock, the goodwill, the customer contracts. In a share sale you buy the company itself, which means you inherit its trading history, its contracts, and its liabilities, including the ones nobody has told you about yet.

Most Australian small business sales are asset sales, and most buyers prefer them for exactly that reason. But a share sale can be the right answer when the value sits in contracts, licences or accreditations that cannot be transferred cleanly. Decide this with your accountant and solicitor before terms are locked in, because a lender will assess the two structures differently and will take security differently.

How the price is built, and why the split matters

Most small and medium businesses are priced on a multiple of earnings, either EBITDA or seller's discretionary earnings. Commonly quoted Australian SME ranges sit around 3 to 5 times EBITDA for ordinary trading businesses, with higher multiples for recurring revenue and lower ones for owner dependent businesses (indicative ranges per creditte and Expert Business Valuations, checked 9 August 2026).

Treat every published multiple as indicative rather than authoritative. There is no public database of Australian SME sale prices equivalent to the ones available in the United States, so every quoted range is built from private samples. Anyone who tells you the multiple for your industry with certainty is guessing with confidence.

The number that actually decides your funding is not the multiple. It is the split between tangible assets and goodwill:

• Tangible assets are the plant, equipment, vehicles, fit out and stock. A lender can take security over them and can often fund them separately through asset finance, which frees up your cash for the rest of the deal.
• Goodwill is everything above the asset value: the customer relationships, the brand, the systems, the earnings themselves. A lender cannot repossess goodwill. It funds goodwill against cash flow and against other security, which is why goodwill heavy deals need bigger deposits.

Two businesses at the same price can need completely different deposits purely because of this split. We cover the goodwill side in depth on our goodwill finance page.

The funding stack

Very few business purchases are funded by one loan. Most are a stack, and building the stack well is where a buyer either preserves their cash or runs out of it in month two.

• Your deposit or equity contribution. Typically 20% to 50% of the price, driven mostly by the goodwill proportion.
• The acquisition loan. Assessed against the trading cash flow of the business you are buying, not just your own position.
• Asset finance on the tangibles. Funding the vehicles and equipment separately, often through a chattel mortgage, keeps cash in your pocket for the goodwill component. See equipment and asset finance.
• Vendor finance. A portion of the price left with the seller and repaid over one to three years. It lowers the amount you need from a lender and signals that the seller believes the earnings will hold.
• Property security. Residential or commercial property you already own can materially reduce the cash deposit required.
• Working capital. The one everyone forgets. See below.

The costs that are not the price

A buyer who budgets only for the purchase price is a buyer who gets into trouble shortly after settlement. Plan for all of these:

• Deposit or equity contribution
• WA transfer duty, calculated on the dutiable assets including goodwill
• Stock at settlement, valued on the day and often paid separately from the price
• Legal fees, and a solicitor who has done business sales before
• Accounting and due diligence fees
• Lender establishment fees and any valuation costs
• Working capital for the first weeks of ownership, while supplier terms reset, debtors are collected and customers settle into the change

You can map the cash position quickly with our business acquisition funding calculator, which separates the deposit, the duty, the working capital and the funding gap.

GST and the going concern exemption

The sale of a business can be GST free under the going concern exemption. The ATO treats a supply as GST free where the sale is for payment, the purchaser is registered or required to be registered for GST, the supplier supplies everything necessary for the continued operation of the business, the supplier carries on the business until the day of sale, and both parties have agreed in writing before settlement that the sale is of a going concern (ATO, Sale of a going concern, checked 9 August 2026).

The written agreement matters. If the exemption is missed, GST is payable at settlement and the buyer has to fund it up front and claim it back later. On a seven figure purchase that is a six figure cash flow gap for a quarter. This is a contract drafting issue, so raise it with your solicitor early.

What lenders actually assess

The price is agreed in a conversation. The funding is decided by a spreadsheet. Five things carry most of the weight:

• Trading history. Usually three years of financials, verified against tax returns and BAS rather than taken from a summary.
• Transferability of cash flow. The question behind every acquisition credit assessment is whether the earnings survive the current owner walking out the door. Revenue tied to the owner personally is discounted heavily.
• Goodwill proportion. The higher it is, the more the deal leans on cash flow and outside security.
• Security. Property, equipment, and in some structures a general security agreement over the business.
• You. Your industry experience is part of the credit assessment. Buying a business in a field you have worked in for a decade reads very differently to buying one you have only researched.

Add backs deserve a specific warning. Sellers normalise earnings by adding back expenses they say a new owner will not incur. Some are legitimate, such as a one off legal cost or an owner's above market salary. Others are the seller's lifestyle dressed up as profit. A lender will test every add back, and the earnings figure that funds the deal is the one that survives that test, not the one in the listing.

Deal terms that help or hurt fundability

• Earnouts tie part of the price to future performance. They reduce your risk and can bridge a valuation gap, but they complicate a lender's view of the total commitment, so disclose them early.
• Restraint of trade. A meaningful restraint on the seller protects the goodwill you are paying for. Its absence is a red flag to a credit assessor, and it is dutiable in WA.
• Handover period. A seller who stays for a structured transition materially improves how the deal reads. Weeks matter more than words here.
• Lease assignment. If the business depends on its location, the lease term and assignment conditions are part of the credit decision. A great business on a lease with twelve months to run is a different proposition.
• Key staff. If a handful of people hold the client relationships, whether they are staying is a funding question, not just an operational one.

Due diligence, from the finance side

Your accountant and solicitor will run the full process. These are the items that most often change whether a deal funds:

• Financials verified against tax returns and BAS, not a profit and loss summary
• Every add back tested and evidenced
• Customer concentration: how much revenue comes from how few clients
• How much revenue depends on the current owner personally
• The lease, its remaining term, options and assignment conditions
• Licences, registrations and accreditations, and whether they transfer
• Staff entitlements and who is essential
• Supplier contracts and terms, including whether pricing survives the change of owner
• The real reason the business is being sold

The cheapest time to find a problem is before you sign.

Thinking about the exit before the entry

If you are buying with a view to selling in a decade, the structure you buy in affects what you keep when you sell. The ATO's small business CGT concessions include a 15 year exemption, a 50% active asset reduction, a retirement exemption capped at a $500,000 lifetime limit per individual, and a rollover. Eligibility generally requires being a CGT small business entity with aggregated turnover under $2 million, or satisfying the maximum net asset value test (ATO, Small business CGT concessions, checked 9 August 2026). This is your accountant's call, not ours, but it is worth raising with them at purchase rather than at sale.

The order that works

Buyers who understand what is fundable before they make an offer negotiate from a stronger position and settle with fewer surprises. The sequence that works:

• Get clear on what you can actually run, and be honest about your industry experience
• Shortlist on earnings quality, not headline price
• Get the deal tested for fundability before signing anything binding
• Run due diligence with your accountant and solicitor
• Shape the terms, the asset and goodwill split, any vendor finance and the handover, while you still have negotiating room
• Submit a properly structured application with a credit narrative, not a pile of documents
• Clear conditions in step with the settlement date
• Fund the first months of ownership, not just the purchase

Found a business you are serious about?

Our free business purchase check walks through the questions a lender will ask about the deal and about you, before you spend money on due diligence. It takes about two minutes and we come back with a straight answer on whether it looks fundable and what it would take. If you would rather talk it through, contact us or call or text 0483 292 005.

For the lending side in detail, see acquisition finance. For the step by step buying process in Perth specifically, see buying a business in Perth.

Frequently asked questions

General information only, current at 9 August 2026. It does not take your circumstances into account and it is not tax, legal or accounting advice. Transfer duty, GST and CGT outcomes depend on the specific transaction. Confirm your position with your accountant, your solicitor and RevenueWA before you commit.