Looking to rent or lease rather than buy? We highlight the advantages and disadvantages

The decision to lease or rent will depend on the specific context and you/your business's individual needs and circumstances.

Here are some benefits associated with leasing or renting compared to purchasing:

Benefits

Your accountant can advise if there are balance sheet implications of an operating lease or rental agreement. i.e., you may not have to disclose the liability of future payments.

Seek advice from a TaxAssist Accountant for your specific situation.

Disadvantages

Check the terms and conditions as these will vary considerable from lessor to lessor. In particular pay attention to:

It's important to note that while leasing or renting has its advantages, purchasing also offers benefits such as ownership, potential long-term cost savings, and the ability to build equity in the asset.

Carefully consider the operational life of the asset. The impact of technology changes on the asset, the volatility of the future value of the asset, how critical the asset is to the day-to-day operation of your business and the ease at which the asset can be upgraded or replaced.

The decision ultimately depends on your specific circumstances and priorities.

TaxAssist Accountants is here to help with all of your tax and accounting needs. Call us on 02 9608 3707 or contact us here to arrange a free initial consultation.

Last updated: 19th January 2024