Would anyone know?: If I was to purchase an untenanted previously commercial property with the intention of reverting it to residential use would GST still be applicable?
Yes, i believe GST is applicable to commercial. Don't forget you you might be able to claim it on a purchase.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
It's not a going concern as untenanted. If the current owner is registered for GST then GST will need to be charged in most circumstances, if you are cnverting to residential after you purchase it is unlikely that if GST is charged to you that yuu would be able to recoup it as it would be an input taxedd supply to you
THankyou Terry w and crj – unfortunately a call to ATO today confirms you are right – the current owner is registered for gst and must charge GST on a commercial property regardless of my intent.
If I the current owner changed the use before I bought no GST would be charged however getting this actually achieved is ? fairly unprobable talking to the agent and lawyers.
Troodyg – but you can claim it back.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes Terryw we could claim it back if we were GST registered in the entity we were buying- though it isnt- not sure how hard it is to be. we were trying to make a win win situation for the vendor and ourselves – we have put in an offer but of course they want more!
Of course we dont really want to pay more! However we thought if we could get out of the GST as we only want it as residential, We would be able to pay the price we were prepared to and in fact the vendor would get more than they want because they would not have to pay the GST to the tax dept!
This one is certainly problems all over we thought of some great solutions to- unfortunately there may be to much red tape to make it worthwhile! Not to worry we have a few more angles yet!
The gst does not go to the vendor, it is passed on by the vendor to the govt – so not an issue with the vendor (although they must receive the gst in order to pay it).
By being registered for gst, you could purchase 'as going concern' hence not paying the tax, providing it meets the other requirements of the ATO.
Scott No Mates wrote:By being registered for gst, you could purchase 'as going concern' hence not paying the tax, providing it meets the other requirements of the ATO.'
It;s not a going concern – it is untenanted
(Get a very short term lease in place, problem solved).
As always – Ask your accountant to make sure
lol.
Queenbury Investments
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