All Topics / Commercial Property / GST Liability on QLD Commercial Purchase

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  • Profile photo of wayne1wayne1
    Join Date: 2017
    Post Count: 2

    Need help to determine which entity is liable for the GST on the property purchase.

    We are buying the commercial property (new build) through a fixed unit trust (not super) with a company as trustee.

    I realise that the the title will show the company.

    purchase is eg. company Pty Ltd ATF trust

    The trust is GST registered, but the trustee is not GST registered

    I assume the Trust is liable for the GST???

    Now if the margin scheme is applied, then we still have to pay the GST and aren’t entitled to any of it back?? eg. $20k GST liability

    Profile photo of JuergJuerg
    Join Date: 2017
    Post Count: 2

    Hi Wayne,
    I do not know the exact ins and outs of Superfunds.
    I do have my own fund, it is a very old structure though.
    I suggest you get real good advice.
    It can make a huge difference to your Tax,CGT, GST etc.
    The goal posts get shifted constantly…only a pro that works with this stuff every working day can give you the correct advice.
    I would also consider exit rules to be applied if one party wants to get out.
    Such a process should be agreed upon before entering a split set up like that.
    For example: That the party that want’s to stay has first right of purchase.
    I do not know who you are getting “into bed” with…and let’s face it…you might not either. What I am saying is that money, stress or other circumstances changes people’s attitudes and outlooks. Therefore having an agreed and signed process for the eventuality seems prudent to me.
    All the best!

    • This reply was modified 2 years, 8 months ago by Profile photo of Juerg Juerg.
    Profile photo of TerrywTerryw
    Join Date: 2001
    Post Count: 16,213

    Buying a property is not a taxable supply. Selling it may be.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide)

    Join Date: 2015
    Post Count: 14

    I would recommend talking to your accountant.
    In Qld, my experience is that if you purchase a CP that is currently leased and will remain leased to the same tenant after purchase then you do not have to pay GST or can get around having to pay it somehow. But if you are buying the CP vacant then you will. However, if you are using a GST registered entity to purchase the CP then although you have to find the funds to pay the GST at settlement it is returned to your purchasing entity (trust or company) in that entities next BAS statement. It is rather a pain having to find the funds first to pay the GST and then getting the GST back as a refund a few months later.

    But as I suggested talk to your accountant to get full and accurate details.

Viewing 4 posts - 1 through 4 (of 4 total)

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