Buying or Leasing Commercial Property in India 2026: Costs, Loans, and What to Check Before You Sign

A commercial property loan in India usually covers only 50% to 70% of the property value, so you must arrange the rest as a down payment. As of early 2026, interest rates run from about 9% to 14% per year, with the lowest rates on a self-occupied, ready property. Most banks link the rate to the RBI repo rate, so your EMI can move up or down later. Before you sign anything, check the title and the building approvals first, then decide if buying or leasing fits your cash.

How the loan works is simple. The bank values the property, lends a part of it, and keeps the property as security. HDFC Bank lists loan against property from around 9.50%, and SBI commercial property loans start near 9.35%. SBI can go up to 75% LTV, which means a 25% down payment from you. Add a processing fee, valuation cost, and legal check fee on top. A loan needs steady income proof and a clean property, so a missing paper can stall the whole thing.

Do your due diligence before money moves. Get the title deed and trace the chain of ownership back at least 13 years (30 years is safer). Pull an encumbrance certificate to confirm there is no old loan or court case on it. Check the occupancy certificate (OC), because without it banks often refuse a loan and you may not get utility connections. If it is a new project, verify the RERA registration on your state RERA website.

Now the buy versus lease cost. Buying means a big upfront amount, a sale deed registration of about 1% plus state stamp duty, and 12% GST if the property is under construction (a ready property with a valid OC has no GST). Leasing is lighter on cash. You pay a security deposit of roughly 3 to 6 months rent, and the rent is a business expense you can claim. Note that any lease longer than 12 months must be registered with the Sub-Registrar, it is not optional.

So if you want to keep cash free for the business and stay flexible, lease. If the location is core to you long term and you can fund the down payment, buy. Either way, read every clause and verify each paper. This is general information, check the official source before you act.

Verify title, OC and RERA first, then compare the real cost of a 25% down payment loan against a 3 to 6 month lease deposit.