All advice appreciated!
I run an accommodation business in Brisbane – holiday houses for people visiting the inner city. I rent the two properties I have at the moment, as my aim is to establish the business until it can purchase its own properties. Been going almost 2 years and going very well, and looking out for the third property at the moment.
My question is – it has suddenly occurred to me (doh!) that my largest expense (rent) is not able to be claimed as an imput tax credit, as the property owners would have to be GST registered and naturally they are not. Therefore, I have a large-ish GST bill each quarter, which would be quite small if i was able to claim a tax credit.
Does anyone have any ideas on how to get around this??
[blink]Lindy
Homely Houses
http://www.homelyhouses.com.au
deluxe accommodation for inner city visitorsHi,
Sounds like a nice business you’ve got going.
In regards to GST, my understanding is that if your landlord is not registered for GST then they would not charge GST on the rent collected, therefore u pay less $ each month (no GST. What u save in cash flow u could be put aside for your BAS payment.
Hope this help.
hrm
I am probably deluded – but i thought that all residential rent was was GST exempt?? I currently have a residential lease (private, direct with owners) but had thought to change to commercial to catch the GST ????
Lindy
Homely Houses
http://www.homelyhouses.com.au
deluxe accommodation for inner city visitorsHi,
Quoting from ‘GST and BAS For Dummies’ by Angela Ryan : residential rents are an input taxed supply. “For residentail rents, it means that a landlord doesn’t charge GST on the rent charged, but the landlords are also not able to claim input tax credits for anything purchased in respect of the property.” Then for commercial residential properties : “Commercial residential premises are a seperate category in relation to the GST. Such premises include hotels, motels, inns, hostels, boarding houses, caravan parks and camping grounds. Accomodation let on a short-term basis is usually taxable, but residential rents are usually input taxed. To help you work out the difference, remember that rented commercial residential premises are taxable (the GST is charged) unless the premises are used for long-term accomodation, which is defined as renting for a period of 28 days or more.”I have cut out some of the longer explanation….just left the facts!
Craig.
Hi Craig,
Thanks – thats greatly appreciated. I will now go to the library and look at that book to get the full story.
Lindy
Homely Houses
http://www.homelyhouses.com.au
deluxe accommodation for inner city visitors
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