Buying a dental practice raises four money questions before settlement: what the practice is worth, whether to buy assets or the company, whether GST applies (usually not, if the going concern conditions are met), and how quickly you can deduct the equipment. From 1 July 2026, the $20,000 instant asset write-off is permanent for businesses under $10 million turnover, which changes the depreciation maths on every chair and scanner.
Australia had 21,308 registered dentists at the end of 2024, and 6,928 dental practitioners in Victoria alone. Most begin as associates. The jump from associate to owner is usually a single transaction: buying a practice. It is also the largest financial decision most dentists ever make, and the tax treatment set at settlement follows you for the life of the practice.
This guide walks through buying a dental practice from the numbers side: valuation, purchase structure, GST, depreciation, duty and funding. It reflects the questions we work through with medical and dental clients in exactly this position.
For most dentists, ownership is the main path to building equity from clinical work: the owner earns both the clinical income and the practice profit, and holds an asset that can later be sold. The trade-offs are debt, management workload and payroll obligations. Whether it stacks up depends on the practice's earnings after a fair wage for your own dentistry.
The demand backdrop matters when assessing any practice. The ABS Patient Experiences survey found 53.9 per cent of Australians saw a dental professional in 2024-25, while 16.1 per cent delayed or skipped dental care because of cost. A practice's fee mix, location and payer profile determine which side of that statistic its patients sit on, and that shows up directly in revenue quality.
The supply side is competitive too: the Dental Board's registrant statistics counted 28,677 registered dental practitioners at 31 December 2024. The buyers you are bidding against are well informed, which makes disciplined analysis of the accounts more valuable, not less.
Dental practices are usually valued on maintainable earnings: the profit that survives after paying a market wage for the owner's own clinical work, adjusted for one-off items, then capitalised. Cross-checks against gross fees and the value of equipment and fitout support the primary method. Patient numbers, rebook rates and lease terms drive the quality of those earnings.
Two practices with identical revenue can be worth very different amounts. The first has three long-serving clinicians, a stable hygiene book and a ten-year lease. The second is a one-dentist practice where most goodwill walks out the door with the vendor. The earnings may look the same in the accounts; the risk does not. Published rules of thumb circulate in the industry, but no reliable multiple applies across practices, so we treat them as conversation starters rather than evidence.
Our advice is to commission an independent assessment before signing anything, and to test the vendor's addbacks line by line: family wages, personal expenses, under-market rent from a related landlord. That analysis is the core of our business valuation service, and it routinely changes the offer price.
Most dental practice purchases in Australia are asset purchases: the buyer's entity acquires the goodwill, equipment and patient records, and starts with a clean tax history. Buying the shares in the vendor's company transfers the company's full history, including any tax, employee and clinical liabilities, so it is the exception and demands deeper due diligence.
The ATO's guidance on acquiring a business puts the share-purchase risk plainly: you may be accepting the risk associated with that company's tax history. An asset purchase also lets you set fresh depreciable values for the equipment you are actually buying, while goodwill becomes your CGT cost base for an eventual exit.
The vendor will be negotiating with their own tax position in mind. The small business CGT concessions can dramatically reduce a vendor's tax on sale where they meet the $2 million aggregated turnover test or the $6 million maximum net asset value test. Understanding what the deal looks like from their side of the table is a genuine negotiating advantage, particularly on how the price is allocated between goodwill and equipment.
Which entity should do the buying is its own decision: company, trust or a combination, weighed against asset protection, profit distribution and the practice's growth plans. Our guide to how trusts work in Australia covers the building blocks, and structure selection is standard scope in our tax planning engagements.
Usually no. The sale of a dental practice can be GST-free as the supply of a going concern if five conditions are met: payment is made, the buyer is GST-registered, the parties agree in writing that the sale is a going concern, the seller supplies everything needed to run the practice, and the seller carries the business on until the day of supply.
The conditions come from section 38-325 of the GST Act 1999, explained in the ATO's guidance on selling a going concern and in ruling GSTR 2002/5. Each condition is practical, not decorative: the written agreement must exist, the buyer must actually be registered before settlement, and the sale must include everything necessary, which usually means the lease is assigned as part of the deal.
Get it wrong and GST of one-eleventh of the price is at stake, which on an $800,000 purchase is roughly $72,700 of settlement cash flow, recoverable later through the BAS but funded by you in the meantime. Contracts usually deal with this through a GST gross-up clause; make sure yours does before exchange, not after.
A dentist buys a suburban Melbourne practice for $800,000 through a new entity with projected turnover under $10 million. The rooms are leased, the vendor is GST-registered, and the contract allocates the price as follows.
| Component | Allocation | Tax treatment for the buyer |
|---|---|---|
| Goodwill | $550,000 | Not depreciable; forms the CGT cost base for a future sale |
| Dental chairs (3 at $18,000) and sundry equipment | $100,000 | Each asset costs under $20,000: immediately deductible under the instant asset write-off |
| Imaging equipment | $110,000 | Over $20,000: small business pool, 15% first year then 30% |
| Fitout | $40,000 | Over $20,000: small business pool, 15% then 30% |
If the going concern conditions are met, no GST is added to the $800,000. First-year depreciation deductions are roughly $100,000 written off immediately plus 15 per cent of the $150,000 pooled assets ($22,500): about $122,500 against the practice's first-year profit. The allocation between goodwill and equipment is negotiable within commercial reality, and every dollar moved from goodwill to sub-$20,000 equipment accelerates a deduction, which is why the vendor (thinking about their CGT concessions) and the buyer often push in opposite directions on the same schedule.
We review the accounts, test the price and structure the purchase before you sign. Fixed fee, buyer's side only.
Contact UsFrom 1 July 2026, small businesses with aggregated turnover under $10 million can immediately deduct each business asset costing less than $20,000, on a permanent per-asset basis. Assets at $20,000 or more go into the small business pool, deducted at 15 per cent in the first year and 30 per cent each year after. Second-hand assets qualify.
The $20,000 instant asset write-off applied to 2025-26 and has now been made permanent from 1 July 2026; the ATO's new-legislation page confirms both measures are law. The practical effect for practice buyers: the annual scramble to settle equipment purchases before 30 June is gone, and the write-off can be planned around the practice's actual profit profile. The pooling mechanics are set out in the ATO's guide to simpler depreciation for small business.
Because the threshold applies per asset, the purchase contract's equipment schedule matters. Three chairs itemised at $18,000 each are immediately deductible; one line item reading "surgery equipment $54,000" invites the pool. Itemise honestly and specifically.
If the freehold is part of the deal, Victoria's rules changed materially from 1 July 2024. Commercial and industrial property entering the new regime pays land transfer duty one final time, then transitions over 10 years to the commercial and industrial property tax of 1 per cent of unimproved land value each year. Where you are buying the business only, with the rooms leased, land transfer duty attaches to property transactions, so a goodwill-and-equipment purchase without land generally sits outside it; have your lawyer confirm the duty position for your specific contract.
On funding, lenders treat established dental practices as strong credit, but loan structure deserves as much attention as the rate: the split between goodwill lending and equipment finance, the term matched to the assets, and personal guarantee scope. Our commercial finance service arranges practice acquisition funding, and asset finance can carry the equipment component separately where that produces a better structure. Credit decisions sit with lenders; our role is putting the numbers in a form they lend against.
Many established dental groups run a service entity: a separate entity owns the equipment and employs support staff, charging the clinical entity a service fee. Done properly, at commercially realistic rates, it is a legitimate structure with a long history in healthcare; the ATO's service entity guidance is the reference point, and our service trust structures guide covers the design questions in detail. Set it up at purchase, when everything is being papered anyway, rather than restructuring later.
Staff transfer has its own rules. When a business changes hands between unrelated parties, the buyer can choose not to recognise prior service for some entitlements such as redundancy, per the Fair Work Ombudsman's guidance on transfer of business; accrued leave liabilities should be priced into the deal either way. On the regulatory side, Ahpra regulates practitioners rather than practice ownership, but advertising, records and clinical governance obligations follow the practice, and the purchase contract, lease assignment and radiation licences belong with a healthcare-experienced lawyer. Income tax questions for the dentists themselves, employees or contractors, are covered in our guide to how doctors are taxed in Australia.
Valuation review, purchase structure, GST and finance in one engagement, so you negotiate from evidence.
Book a MeetingDisclaimer: The information provided in this article is general in nature and does not constitute specific tax, legal, or financial advice. Practice purchases involve legal, credit and regulatory matters that require specialist input. We recommend seeking professional advice tailored to your individual circumstances. 42 Advisory is a CPA firm and Registered Tax Agent.
Established practices are generally profitable, but the meaningful measure is profit after a market wage for the owner's own clinical work. A practice that only pays you a dentist's salary has bought you a job, not a business. Review at least three years of normalised accounts before relying on any profit figure.
It is not legally required, but we recommend one for any material purchase. An independent assessment tests the vendor's earnings addbacks, the sustainability of the fee base and the lease, and it strengthens both your negotiation and your finance application.
Usually yes, where the sale qualifies as a GST-free supply of a going concern under section 38-325 of the GST Act: written agreement, GST-registered buyer, everything necessary for the business supplied, and the practice carried on until the day of supply. The contract should also include a GST clause in case a condition fails.
Lending terms vary by lender, the practice's earnings history and your clinical track record, so there is no single answer. Healthcare professionals generally access favourable commercial lending. Structure matters as much as the headline rate: term, security and how equipment finance sits alongside the goodwill loan.
Ahpra's National Scheme regulates registered practitioners rather than practice ownership, so ownership structures are generally open. Clinical governance, advertising and record obligations still apply to the practice, and state rules can affect specific matters such as radiation licences. Have a healthcare-experienced lawyer confirm the regulatory position for your structure.