Hi Guys a Question for the accountants or lawyers I am buying a Commercial Investment Property Total Price $280,000.00 Including GST Had valued by Financial Peoples Valuer at my cost! He has valued Property at $255,000.00 not including GST AND IS REFUSING TO ADD ON THE GST. WHICH WILL STUFF UP MY PURCHASE. IS IT LEGAL TO DO THIS I THINK IF GST IS ADDED ON THE PURCHASE YOU HAVE TO ADD GST TO VALUATION
HELP FRANKThis whole area is fraught with danger and confusion.
I spent a couple of months with a RE agency just concentrating on commercial & industrial property sales/leasing.
The whole gst arena, causes lots of confusion with agents as well as buyers and owners.There are so many scenarios depending on whether the buyer or seller are or are not registered for gst as to whether they can claim it back after the sale, whether it has to be levied in the first place, etc etc.
One ruling that seems to be employed all the time is if the commercial property has a tenant in it on a valid lease at the time of sale, then it is classed as a ‘going concern’ and thus no gst is levied.
I would suggest you consult an expert accountant to get the low down on gst as applicable to commercial property and leasing.
kp
Hi Frank
Is it “legal”? Yes this is normal practice as is you paying for the val. One solution is to register for GST.
You still have the problem of funding the the GST to the vendor on settlement (even though you will claim it back in your next BAS). There possible solutions for this but you haven given enough detail in your question, such as why it is subject to gst in the first place (assuming the vendor is registered).
tony
Hi Frank here again thanks for youre response I dont have a problem with GST I pay and claim back GST every 3 Months I am registered, the Vendor is registered. I dont no what the valuer is doing I have been told he is refusing to add the GST on to the Valuation which seems ridiculous I spoke to my accountant and he said that he had to add on gst see the sale is 280K with GST his value $255K without GST so my Broker says can I find the difference $25K so if the valuer adds on the GST I dont have to find another $25K confused Frank
Hi Frank
By the sounds of it the property is unable to be sold GST (for whatever reason)and you have the timing issue of the short fall.
Whatever you do suggest you settle on the last day of your bas and claim back asap to reduce the time you are out of pocket.
You could put it on your creditcard….
Regards
Tony
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