Before term, rent, or incentives, it helps to know what land tenure sits under the premises. This shapes what a landlord can offer, what restrictions already exist, and what due diligence you need before signing.

Freehold: the NSW default

Most commercial property in NSW is freehold – the owner holds the land outright. Permitted uses are set by zoning under the local council’s Local Environmental Plan (LEP). If your use doesn’t fit the zoning, you may need a Development Application (DA) or change-of-use approval before you can operate.

Leasehold: how the ACT is different

There’s no freehold land in Canberra. The Commonwealth owns the underlying land itself, and grants a Crown Lease to occupy and use it, usually for a term of 99 years. Day-to-day administration sits with the ACT Government’s Territory Planning Authority, so it’s the Authority, not the Commonwealth directly, that a landlord deals with for approvals, renewals, and lease variations. A separate Commonwealth body, the National Capital Authority, only controls planning for National Land such as the Parliamentary Triangle, so it rarely comes into play for standard commercial premises.

In practice, holding a Crown Lease works like ownership – you can sell it, mortgage it, lease it out, and the term doesn’t reset when the property changes hands. However, because the underlying land is never actually owned outright, the lease document itself carries real legal weight – it sets out what the land can be used for and on what conditions, in a way a freehold title simply doesn’t.

For a tenant, that means:

• Permitted use is set by the Crown Lease’s purpose clause, on top of general planning rules. If your business doesn’t fit it, the landlord may need a lease variation through the Territory Planning Authority – which can trigger a Lease Variation Charge (betterment payment).
• External Building works need an approved Development Application through the Territory Planning Authority, in addition to what the Crown Lease allows. Internal Fit-Outs generally only require a Building & Certifier Approval, unless the structure of the building requires changing.
• Some properties sit under a land rent scheme – an annual payment to the ACT Government instead of, or alongside, other costs. Worth checking, as it behaves like a recurring holding cost.

Zoning in each market

Sydney (NSW). Zoning sits with the local council. Common commercial zones include B1 (Neighbourhood Centre), B2 (Local Centre), and B4 (Mixed Use), each with its own list of permitted uses. Confirm your use is allowed, or that a DA pathway exists, before signing.

Canberra (ACT). Zoning sits under the Territory Plan. Because the Crown Lease can add its own use restriction on top, a Canberra tenant effectively checks two layers – zoning, and the purpose clause on that block’s Crown Lease.

Why it matters

A premises can look right for your business without the tenure actually supporting it. Getting this checked early – before fitout drawings or financial commitments – avoids signing a lease only to find the permitted use doesn’t cover what you do.

Have any queries, feel free to get in touch!