Can someone help me out on this one? I’m currently trying to get my head around how to calculate rent when I crunch the numbers on a property. If the current rent of a property is $165 (incl $15 GST), then what figure do I use, 150 or 165 ? I understand the agent passes on the GST portion to the govt, so therefore I should only calc for $150, right??
Hi Cinematt,
I would love to help you but need a bit of an understanding what is going on. Is the rent you are to receive $165/pw including GST? If that is the case, is it a commercial property because residential properties are not charged GST.
Let me know & I will try to help fill in the gaps.
Kim
If it is a commercial property and the rent is 150,your pm will charge the tenant 150 plus 15 gst,take out his fee,plus gst,and send you the balance.You are then responsible for sending GST collected to the ATO
Tools
Totally agree Tools. However if this is the only commercial property, being that the rent is under $50,000pa he can choose whether to be registered or not & hence may not need to charge GST at all.
Thanks Kim and Tools. Yes, the prop is commercial but just to clarify a few things:
Tools, you said the agent takes out his fee, plus GST and sends me the balance and I send the GST to the ATO (the part about the agent taking out the GST confuses me). So just to confirm, the agent charges GST, and passes this on to me and then I pay the GST in the form of a BAS?
Kim, that’s a great tip about if it was the only commercial prop. The current landlord must be reg for GST. Does that mean (being first commercial prop’ I could not register for GST and still charge $165 for rent?
Interesting… thanks, Matt
JKM is correct in that if a business has a turnover under 50,000 then gst registration is optional.I assume this is the same for properties.But it also means that you can not claim the gst that you have paid for repairs,agents commission etc.
The agent acting on your behalf will charge your tenant gst on the rent.The agent is also a business,so he must charge gst to you for his services.The balance is sent to you (taking in to account any other adjustments) and you must remit the gst you have collected with a regular business activity statement.
Tools
Thanks Tools, I appreciate your help, the joys of GST!
MattJust to be safe, you’d better let your tenant know if you are not registered for GST, otherwise they may be illegally claiming an input credit from the ATO.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
