farmcfo.com.au/tools/buy-or-lease-land · 0412 759 847Buy or lease land?
Enter the area, purchase price, lease rent and your finance terms. The calculator compares the yearly cost of owning (interest, the return your deposit and buying costs could have earned, rates and upkeep, less any expected rise in value) with the yearly lease, and works out the purchase price per hectare at which the two cost the same.
Your figures stay in this browser. Nothing is sent to Farm CFO or anyone else.
- Purchase price
- $2,000,000
- Yearly cost to own
- $143,520
- Yearly cost to lease
- $88,000
- Difference
- Leasing is $55,520 a year cheaper
- Break-even purchase price
- $2,908/ha
- Cash out each year if you buy
- $112,020
Plus $100,000 buying costs. Loan $1,400,000.
Interest $101,220, deposit's lost return $31,500, rates and upkeep $10,800.
The price at which owning costs the same as leasing.
Interest, rates and upkeep, before any principal repayments.
The example is an invented 400 ha block at $5,000/ha with 5% buying costs, a 30% deposit, a 7.23% loan rate (RBA average small business rate on new loans, August 2026), the deposit otherwise earning 4.5%, $6,000 of rates, $12/ha upkeep and no assumed growth, against a lease at $220/ha.
The working
- Yearly cost to own = loan interest + (deposit + buying costs) x what that cash earns or saves now + rates + upkeep - expected rise in land value.
- Yearly cost to lease = lease rent per hectare x hectares.
- Break-even price per hectare = the price at which the two are equal.
- Principal repayments aren't a cost here because they build equity, but they do take cash, so plan for them in the cashflow.
General information only. This calculator doesn't take account of your circumstances and isn't tax, credit or financial product advice. Check figures with your accountant before relying on them.
Want the numbers done for you?
Farm CFO builds the budget, the monthly cashflow and the tests your lender will run, at a fixed price.
Read next: Buying the neighbour's block
Questions
Should I include capital growth?
Try it both ways. Growth can make buying worthwhile over time, but it doesn't pay the bank each year. Leaving it at 0 shows the cash cost.
What about stamp duty?
Enter it in buying costs. Each state sets its own transfer duty, and some have exemptions for primary production land, such as NSW for some family farm transfers. Check your state revenue office.