Investment - Commercial - residential property

[JBmurc]

Sounds like my share trading company can also buy Commercial property ....which is brilliant

Now one property I'm very keen on the owner isn't sure round GST on sale etc ...he stated he never claimed any when he purchased 20yrs+ ago so I wouldn't think he wouldn't have to pay any on sale zero-rated ?
Could I then claim GST on purchase?

[fungus pudding]

Sounds like my share trading company can also buy Commercial property ....which is brilliant

Now one property I'm very keen on the owner isn't sure round GST on sale etc ...he stated he never claimed any when he purchased 20yrs+ ago so I wouldn't think he wouldn't have to pay any on sale zero-rated ?
Could I then claim GST on purchase?

If he is GST registered he probably bought it zero rated, which is probably why he didn't claim it. Or is the rent under threshold where registration is compulsory? Has he been paying GST on rent? You need to check this with your accountant.

[JBmurc]

If he is GST registered he probably bought it zero rated, which is probably why he didn't claim it. Or is the rent under threshold where registration is compulsory? Has he been paying GST on rent? You need to check this with your accountant.

yeah the income from the mixed commercial property is under 60k p.a ...still it looks like it will be closer to 70-80k with a garage turning into another tenantable space.... so will have to be registered .....so would I be right if the current owner isn't GST reg...I could BUY and then register for GST on the likely higher income I could then claim 15% of the total value paid for the property ???

[fungus pudding]

yeah the income from the mixed commercial property is under 60k p.a ...still it looks like it will be closer to 70-80k with a garage turning into another tenantable space.... so will have to be registered .....so would I be right if the current owner isn't GST reg...that if it brought is then registered for GST on the likely higher income I could then claim 15% of the total value paid for the property ???

If you have those details correct, then yes. But you would not be buying it zero rated. (That means GST is included but at zero percent and it's simply a mechanism to avoid one party paying and the other claiming it which is normal practise, but exceptions exist with buildings and going concerns to avoid this with large sums of money bouncing around unnecessarily) You would just buy it inclusive of GST as you are going to claim that GST.
That is how it was last time I was involved with a similar transaction and I'm not aware of any changes, although I'm no longer daily hands on with such things, but ring the IRD, GST dept. - you do not need to identify yourself - and flick it past them.

This will tell you more:
http://www.prlaw.co.nz/article/83/11...-Transactions/

'The Vendor can’t say the Purchase price is “Plus GST (if any)” because he is not registered. So the Purchase price will be “Inclusive of GST (if any)”. And the Purchaser will be able to claim the GST in his next GST return.'

P.S Be aware that if you register and claim then you will have to pay GST on rent received. You may be able to increase rentals by the GST which tenants can claim back if registered.