Outgoings are the building's running costs a landlord charges on top of rent, and in a retail lease they are regulated: Victoria has barred a landlord from recovering land tax since 1 July 2003, while New South Wales caps it at a single holding assessment.
Skai Solutions answers the phone for restaurants, cafes and takeaways in Australia and New Zealand, and outgoings come up because they are the occupancy cost nobody forecast. Every guide to this subject is written for an office tenant. This one is written for a venue with a kitchen, which attracts outgoings an office never sees, and it names what your landlord legally owes you.
Outgoings are the costs of owning and running the building, charged to you on top of rent. The usual list is council rates, water and sewerage rates, land tax where the state allows it, insurance, owners corporation or strata levies, common area cleaning and lighting, and in a shopping centre, management and promotion fees. Skai Solutions has put this page together for hospitality tenants because the generic versions of it are written for an office, and a kitchen attracts outgoings an office never sees.
What is not an outgoing matters just as much. Structural repairs, the landlord's own financing costs, capital works and the cost of fixing something that was already broken when you signed are not running costs, however they are labelled in a schedule. In Victoria the position is blunter than that: the Victorian Small Business Commission's own wording on outgoings is that a tenant "is not liable to pay outgoings except where they are detailed in the lease". An item that was never listed is not payable because the managing agent has started invoicing it.
It depends entirely on which of three structures you signed, and the words on the listing are not reliable.
| Structure | What you pay | Who it suits |
|---|---|---|
| Gross | One rent figure. The landlord absorbs the outgoings | A first venue, or anyone who needs a fixed, forecastable occupancy line |
| Net | Rent plus your share of every listed outgoing, reconciled annually | A tenant with the time to audit a statement, in a building with low and stable costs |
| Semi gross | Rent covers a base year of outgoings, you pay increases above it | Most hospitality tenancies, and the structure that produces the most disputes |
Semi gross is where venues get hurt, because the base year is a number set once and then inherited. If the base year was a quiet year, or the premises was vacant for part of it, every later increase is measured from an artificially low floor. Ask what the base year figure was and what it included before you sign anything described as semi gross.
A gross lease is not automatically the cheaper buy. You are paying the landlord to carry a risk, and they price it. What a gross lease buys you is a predictable occupancy cost, which is worth real money in a business whose other costs move weekly.
This is the single largest outgoing in dispute and the answer changes at every state border. The comparison below is from the law firm Clayton Utz's retail leases comparative analysis, which states its information is current as at 1 January 2026. Attributed because it is a commercial publisher, not an official one, and worth checking against your own state's Act before you rely on it.
| State | Land tax recoverable from a retail tenant? | Section |
|---|---|---|
| NSW | Yes, but capped at the landlord's liability on a single holding basis | s 26 |
| VIC | No. Barred since 1 July 2003, and the bar extends to the commercial and industrial property tax | s 50 |
| QLD | No | s 7(3)(a) |
| SA | No, though the landlord's liability may be reflected in the rent | s 30 |
| WA | Yes, on a single holding basis and by the tenant's proportion | s 12(1g) |
| TAS | Yes | s 18 |
| ACT | Yes | s 70 |
| NT | No land tax exists | - |
Two practical consequences. If you are in Victoria or Queensland and a land tax line appears on an outgoings statement, that is a question to ask in writing, not a bill to pay. And if you are in New South Wales or Western Australia, the words "single holding basis" are the ones that matter: the landlord may pass on the tax as if your building were their only property, which on a large portfolio is a much smaller figure than their actual assessment.
In a retail lease these are not courtesies. They are implied terms of the lease. The New South Wales positions below were read from AustLII's consolidated copy of the Retail Leases Act 1994 in October 2026, because the official legislation site would not serve either of our networks that day.
Victoria runs the same machinery with sharper teeth. The Small Business Commission states that an estimate must be given before the lease is entered into and at least one month before each accounting period, and then says plainly: "The tenant is not required to pay for outgoings if an estimate has not been given." The statement is due no later than three months after the accounting period ends, must be audited, and is exempt from audit only where it covers GST, utilities, council rates and insurance and comes with proof of payment.
So the first question on any outgoings dispute is not whether the charge is fair. It is whether you were given the estimate. In Victoria that one question can remove the liability entirely.
This is the part the general guides leave out, and it is where the money is for a kitchen.
Water, and not at the office rate. Sydney Water's non residential usage guideline rates a cafe or fast food premises at 2.5 litres per square metre a day against 0.4 for an office, so a venue uses more than six times the water of an office of the same floor area. If your landlord apportions water across the building by floor area, you are subsidising every tenant who is not cooking. That is the single most useful number to take into a lease negotiation, and our page on the restaurant water bill has the source.
Trade waste. If the landlord holds the water account, the trade waste charges your kitchen generates may arrive inside an outgoings apportionment rather than as a bill you can read. Ask for the underlying invoice, because that charge is driven by your discharge, not by your floor area.
Grease trap and exhaust. The grease trap pump out and the kitchen exhaust clean are sometimes the landlord's building services and sometimes yours, and the lease rarely says which clearly. Settle it before you sign, because both are recurring and one of them is a fire safety obligation.
Insurance. A building insurance premium on a premises with a commercial kitchen is not the same premium as on a shopfront, and your own restaurant insurance sits on top of it. Check whether you are contributing to a policy that only covers the landlord's interest.
Start with the estimate and the statement side by side, then ask for the invoices behind any line that moved more than the rest. The Act gives you two specific entitlements worth using: the written submission to the auditor in New South Wales, and the proof of payment that must accompany an unaudited statement.
If it does not resolve, the state small business commissions run low cost mediation, and they do produce outcomes. The Victorian Small Business Commission publishes a case where a tenant found outgoings far exceeded an underestimate and the landlord agreed, through the Commission's dispute resolution, to cap outgoings at A$7,000 a year. That is what a cap looks like as a negotiated outcome rather than a theory.
Three habits that prevent most of it. Keep every annual statement, because an argument about a base year four years ago is unwinnable from memory. Diarise the date the estimate is due, one month before your landlord's accounting period, and ask for it the day it is late. And put outgoings in your own numbers as a separate line from rent, inside your overhead costs, so a 20 percent rise in outgoings cannot hide inside a rent review.
Skai Solutions answers phones. We are not lawyers, leasing agents or valuers, and this is general information rather than legal advice. Two limits in particular. First, these protections apply to retail leases, and whether your premises is a retail shop under your state's Act is a threshold question worth paying someone to answer, because a venue in an office tower or an industrial unit may sit outside the Act entirely. Second, New Zealand runs a different system again, usually on the Auckland District Law Society deed, where outgoings are negotiated schedule items rather than regulated ones, so none of the state sections above apply.
Only here. Occupancy is a fixed cost, so the way it is survived is covers, and the cheapest covers are the ones already trying to reach you. Skai Solutions is an AI receptionist for restaurants, cafes and takeaways in Australia and New Zealand: it answers the phone, takes the booking or the order and puts it where your team will see it, with setup taking about five days. If your phone mostly carries agents, suppliers and enquiries rather than bookings, a basic message-taking plan is the right buy and it is not us.
What are outgoings on a commercial lease?
They are the costs of owning and running the building, charged to you on top of rent: council rates, water and sewerage, land tax where the state allows it, insurance, strata levies, common area costs, and management and promotion fees in a shopping centre. Structural repairs, capital works and the landlord's financing costs are not outgoings, whatever a schedule calls them.
Who pays outgoings in a commercial lease?
Whoever the lease says, and there are three structures. Under a gross lease the landlord absorbs them and you pay one rent figure. Under a net lease you pay your share of every listed outgoing and it is reconciled annually. Under a semi gross lease the rent covers a base year and you pay increases above it, which is the structure that produces the most disputes.
Can my landlord charge me land tax as an outgoing?
It depends on the state. Clayton Utz's comparative analysis, current at 1 January 2026, has it recoverable in NSW capped on a single holding basis under s 26, in WA on a single holding basis under s 12(1g), and in Tasmania and the ACT. It is not recoverable in Victoria under s 50, Queensland under s 7(3)(a) or South Australia under s 30, and there is no land tax in the Northern Territory.
What happens if my landlord never gave me an outgoings estimate?
In Victoria the Small Business Commission states that the tenant is not required to pay for outgoings if an estimate has not been given. In New South Wales section 27 makes the written estimate an implied term of the lease, due before the lease is entered into and at least one month before each accounting period. Either way the first question in a dispute is whether the estimate arrived, not whether the charge is fair.
Does an outgoings statement have to be audited?
In both NSW and Victoria, yes, with one exception. NSW section 28 requires a report from a registered company auditor on the statement. The audit is not required where the statement covers nothing beyond items such as land tax, water, sewerage and drainage, council rates, insurance and strata levies, and the landlord attaches the assessments, invoices or receipts. If your statement is unaudited, check that proof is attached.
Does gross rent include outgoings?
In a true gross lease, yes, the landlord absorbs them. The trap is semi gross, which is often advertised in the same language: there the rent covers a base year of outgoings and you pay every increase above it. Ask for the base year figure and what it included, because a quiet or partly vacant base year makes every later increase larger.
What outgoings does a restaurant get charged that an office does not?
Water above all. Sydney Water's non residential usage guideline rates a cafe at 2.5 litres per square metre a day against 0.4 for an office, so a kitchen uses more than six times the water of an office on the same floor area, and an apportionment by floor area quietly subsidises everyone who is not cooking. Then trade waste, grease trap pump outs, exhaust cleaning and a building insurance premium priced for a commercial kitchen.
Are outgoings negotiable before signing?
The items are. Ask for a list of every outgoing the landlord intends to recover, a cap or a collar on the total, clarity on whether grease trap and exhaust servicing are building services or yours, and water metered separately rather than apportioned by area. Separate metering is usually the single highest value ask for a food venue.