All Topics / Commercial Property / No GST on commercial purchase if tenanted in Vic??

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  • Profile photo of jmsracheljmsrachel
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    @jmsrachel
    Join Date: 2012
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    December 6, 2012 - 9:04 am

    Hi Everyone,

    Could some one confirm if this is true or not. I'm looking at purchasing a factory and got told today that if you purchase a commercial property that is currently bring leased there is no GST payable on the sale price? I've never heard of this before but the guy that told me this has numerous commercial properties so should know what his talking about. Is this True??

    Profile photo of TerrywTerryw
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    @terryw
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    December 6, 2012 - 9:29 am

    It could be true in some circumstances. No GST if it is a going concern with a few conditions.

    You need to be very careful with the contract of sale.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of jmsracheljmsrachel
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    @jmsrachel
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    December 6, 2012 - 9:37 am

    Thanks Terry, the advice this guy gave me was that if you find a factory that you like and it's vacant negotiate with the vendor to lease it before signing of the contracts. Of course the lease will be under the vendors name but would then transfer to my name once everything is settled. 

    Paying the GST doesn't really worry me as i'll get it back through my business. It's finding the extra $40K for a couple months is a pain.

    But like everything you need to be careful.

    Profile photo of Scott No MatesScott No Mates
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    @scott-no-mates
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    December 6, 2012 - 11:03 am

    There are about 4 conditions which need to be met – check out the ATO website or ask your accountant.

    Profile photo of TerrywTerryw
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    @terryw
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    December 6, 2012 - 11:10 am

    I think it is safer and easier just to pay the GST and then claim it back later. Otherwise the vendor will want to insert a special condition to make the purchaser liable for it if the commission comes back later and says GST is payable – which it could be if it is not really a going concern.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of jmsracheljmsrachel
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    @jmsrachel
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    December 6, 2012 - 7:33 pm

    Thanks for clearing that up. I think It’s just safer to pay the GST.

    Profile photo of Scott No MatesScott No Mates
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    @scott-no-mates
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    Post Count: 3,856
    December 7, 2012 - 7:31 am

    Just get the timing right so that settlement and your BAS return are only weeks apart.

    Profile photo of jmsracheljmsrachel
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    @jmsrachel
    Join Date: 2012
    Post Count: 711
    December 7, 2012 - 9:41 am
    Scott No Mates wrote:
    Just get the timing right so that settlement and your BAS return are only weeks apart.

    My accountant told me the same thing today. Don’t see the point in paying a tax and receiving it back a week later.

    Profile photo of Scott No MatesScott No Mates
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    @scott-no-mates
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    December 7, 2012 - 11:18 am

    My brother did the same thing – and he's an accountant.

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