Hi,
As far as I understand it, residential property is free/virtually free of GST on purchases, rent, etc. For commercial properties, or those being operated as a going concern, would GST apply?
Someone suggested registering in NZ for GST, and that that would result in a GST neutral situation – does that sound right?
Any help or insights would be much appreciated.
Cheers
Gidday Nmcace.
There is no GST on NZ residential investment properties.If however you invest in a casual renter (ie holiday home where various people rent your property for short periods) then you can register for GST. this would mean you can claim back 12.5% of the purchase price. However you would then pay GST on your income and of course on the sale price when you sell it.
For the commercial properties I think GST is payable unless it is a going concern.
if you want advice in NZ I know an excellent accountant.
cheers
Swinys[biggrin]In NZ residential property is exempt from GST however, rates, insurance, repairs and maintenance will include GST and cannot be claimed back.
Commercial property is “Zero rated” for GST if it is a going concern. A certain percentage of the property must be rented in order to be a going concern.
If you are a commercial property investor I suggest you register for GST. If you are not registered you cannot charge GST on the rent and you cannot claim the GST back on the outgoings.
If you buy a vacant building this will incur GST however, if you are registered for GST you can then claim it back.
There’s more info on http://www.ird.govt.nz
Cheers
Jeff
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