For a commercial property to be sold 'as a going concern' and therefore not subject to gst : does there need to be an actual lease in place or are tenants on a periodical lease suffice((not sure if it is called this in the commercial world)ie no lease in place).
Troody, there are a few questions to ask for your own peace of mind: 'what rights do you have if there is no lease in place?', 'what is the period of notice required for the tenant?', 'is it possible that the tenant will agree to sign a lease for a period of one month?'. It is always best to cover your rights as the building owner as well as to have some evidence of a lease giving both parties rights (right to occupy, right to payment, termination conditions etc).
what concern is actually "going" ? or will be at the time of sale ?
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If there is no lease it wil be treated as vacant possession and you will pay GST.
For referance if a comm property is leased it will have a going concern value e.g. Value if sold with current tennent. If it is vacant it will generally be sold on vacant possession value. Valuers will often include both values in a report. Many banks only lend against vacant possession value (unless a very strong deal).
If your property is not purchased as a going concern e.g. Vacant or to be owner occupied – you pay GST. Often major banks will lend the GST component on a short term overdraft unitl you lodge BAS and get the GST back (lent over and above normal LVR).
If your not registerred for GST make sure you buy going concern – alternitivly register for GST, lodge one BAS, get your refund and deregister from GST.
To the best of my knowledge if their is no lease – you will be treated as vacant possession – I could be wrong…
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