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  • Profile photo of crashycrashy
    Join Date: 2003
    Post Count: 736

    In NZ, properties are sold GST inclusive. Property traders may claim back not only the GST (1/9th of the purchase price) but also the GST on the intended renovation costs. Under NZ law, this must be refunded within 15 days of a claim. This means you can fund the renovation using the GST refund, or use the refund to repay the deposit.


    purchase $216,000
    GST – $24,000
    renovation – $27,000
    GST reno – $3000

    GST refund – $27,000

    this assists with cashflow a great deal….

    Profile photo of Playa ChickenPlaya Chicken
    Join Date: 2004
    Post Count: 128

    Yep Crashy, you're onto it! 

    That's exactly how a lot of traders doing flips and renos and investors doing lease options fund their next purchase here in New Zealand.  You've got to remember though  that the GST refund only applies to trades, NOT buy and hold properties. 

    Interest rates might be a bit higher than in Oz, but the savings on getting your GST refund, NO stamp duty and NO capital gains tax more than makes up for that.

    The amazing thing is that the banks actually fund 80% of purchase price INCLUDING GST  .  If you're really smart about choosing your settlement date you can have it all lined up so that you settle right at the end of your current GST period and you immediately claim the back, so you might only have to wait 2-3 weeks for the money!!

    Before the credit crisis property traders were getting funding at 80% of registered valuation, so if you'd negotiated really well you were realistically being funded 100%. I know a lot of deals that were done that way.   That easy-money has all dried up now though!!


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