Hi all
I am crunching some numbers on purchasing a mechanical workshop.
Has anyone had any experience with GST when purchasing a commercial property? I am not sure if i should be factoring the 10% into my Cash on cash return since i would be claiming it back in 3months on my BAS statement.
What % would i be refunded after that 3 mths?
Cheers,
MattMatt Jones | Property Resource Shop
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Hi MattJones,
My understanding re commercial properties is, if the property is vacant then GST is applicable and payable, if not, it is perceived to be a “going concern” therefore GST does not enter into the buyingprice at all.
Therefore if GST is payable on a vacant property, and if you are able to negotiate settlement at the end of the quarter, you will not be out of pocket for very long when you submit your BAS.
The % refund depends on what other GSTable incoming and outgoings you have. If you have no income at all you will receive the entire amount of GST paid out.
Bon Chance.[exhappy]Thanks Avanti
I am not currently registered for GST but in the process of setting up a discretionary trust. If i go ahead with the deal i will be registering for GST.
I have a small income (30k) so it would be wise for me to recieve benefit from any profit from the deal via the trust. With this sort of current income i guess i could bank on getting 70% of it back given my tax bracket. Is this correct?
If i settle on 24th March and i assume the quarter finishes on 31st March, how long would it take for the funds to be back in my account?
Merci Beaucoup
Matt
Matt Jones | Property Resource Shop
https://www.propertyresourceshop.com/
Email Me | Phone MeLearn What It Takes To Instantly Access All The Partners, Money, Deals and Strategies You Need, To Truly Make It In Property Investing and Leave Your Day Job Behind...
HI Matt,
If you settle on 24th March, quarter finishes 31 March. 3rd quarter ends 31 March with any payables due to be paid usually by third week of following month. If you are getting a refund it makes sense to complete BAS form and lodge as quickly as possible. If you have a payable, complete the BAS and lodge on the due date.
You would be wise to discuss this with an appropriately experienced accountant – he would be in the best person to advise you with the best information for your particular situation.
I set up a discretionary trust when I purchased my property and have since discovered that it would have been better to set up a company rather than the trust. Ah. . . Hindsight is a wonderful thing!
Bon Chance
[exhappy]
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