GST question

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spierreyoung
Member
@spierreyoung
Join Date: 2007
Post Count: 14
September 21, 2011 - 2:54 pm
Hi
my family trust has a corporate trustee, which owns a residential property with a tenant.
the family trust has ABN but is not registered for GST.
am thinking of purchasing a commercial property using the family trust and its corporate trustee.
thinking of registering the family trust for GST.
Q: if the family trust is registered for GST, does it mean that 1/11 of the rent collected from the residential property has to be paid to the tax man as GST?
thanks in advance
P
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
September 22, 2011 - 7:23 am
There is no GST on residential property rents.
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Scott No Mates
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@scott-no-mates
Join Date: 2005
Post Count: 3,856
September 22, 2011 - 10:23 am
I’m not 100% certain here Terry.
Although there is no gst on residential property per se, it is irritation input taxed which is then claimable.
I am aware of one person who has a similar property to one of mine but is a corporate owner registered for gst, he can claim input credits but we must rent out at the same price. So we are treated differently for tax purposes.
You may need a 3rd opinion.
spierreyoung
Member
@spierreyoung
Join Date: 2007
Post Count: 14
September 22, 2011 - 2:05 pm
Thanks Scott and Terry, it seems that the answer is no.
See below link from the ATO:
http://www.ato.gov.au/businesses/content.aspx?menuid=0&doc=/content/00221985.htm&page=10&H10
Dan42
Member
@dan42
Join Date: 2008
Post Count: 619
September 23, 2011 - 12:02 am
Scott No Mates wrote:
I am aware of one person who has a similar property to one of mine but is a corporate owner registered for gst, he can claim input credits but we must rent out at the same price. So we are treated differently for tax purposes. You may need a 3rd opinion.
Residential rent is input taxed, which means that no input tax credits are paid on rent received, but no GST can be claimed on expenses related to the residential rental income.
eg – Management fees and repairs would most probably have a GST component, but no claim can be made for these GST credits as the expenses relate to residential rent, which is input taxed for GST.