Hi All,
I need some advice on GST. I have a Unit Trust in which I buy the properties. Up until now I have purchased land, built a house and then held and rented or sold. On the ones I sold I had to pay GST on the full sale price even though I could only claim back GST paid through the build and completion costs.
I have just purchased an existing house which I am renovating to rent out. GST wasn't specified in the purchased but can I claim GST out of the purchase price? If I don't then when I sell it will I still pay the full GST?
Any advice would be great.
ThanksHI thereyou might like to review the above link which gives some good information on the GSTyou need to consider the situation of the vendor from whom you purchased the property to establish if you need to pay GSTthanksI am also curious about the issues of GST. I am intending on undertaking a dual occupancy development next year and then using the equity in it to do another one and so on. If I undertake the developments in my name and do not set up a company for it, then do I still have to pay collect and pay GST to the ATO?
Also, I am intending on keeping each development for probably at least 10 years, whereupon I plan to sell some of them to pay the loans off. Obviously when I sell them in 10 years time they will be worth considerably more than if I were to sell them immediately on completion, so how is GST supposed to be worked out in 10 years time? Surely it's not just a straight 10% of the sale price?
Any assistance would be greatly appreciated.
Can be a very tricky area. I am investigating doing a dual occupancy. It really depends on your intention. If it is to purchase with the intention to make a profit then the ATO could well argue thats its an enterprise and therefore subject to GST. It doesnt matter which entity it is bought in.
Best to get advice from an accountant you can trust BEFORE purchase as ,if you want to claim GST but you didnt register, bad luck.
If 10 years down the track the ATO wants 1/11 of the price and you didnt register, bad luck. GST doesnt take account of inflation. However, if you sold in 10 years, it would be easier to argue that it was simply a sale of a capital asset (ie a rental property), therefore you are not a trader and you could claim capital gains discounts etc (unless bought in a company!).
Really depends on your intention, and whether tax is most important or asset protection is most important.
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